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Noonan: ‘We don’t know who audited Anglo in 2008′

Michael Noonan says IBRC can’t make out exactly who from Ernst & Young was responsible for auditing its 2008 accounts.

Image: Brian O'Leary/Photocall Ireland

FINANCE MINISTER Michael Noonan has revealed that staff at the former Anglo Irish Bank cannot identify the exact personnel responsible for auditing the bank in the financial year to September 2008.

Noonan said he had been informed that the bank – now rebranded as the Irish Bank Resolution Corporation – “is not in a position to positively identify all the principal persons” at auditing firm Ernst & Young “who were responsible for the conduct of the audit.”

Replying to Dáil questions from Sinn Féin finance spokesman Pearse Doherty, Noonan said the bank had told him it was “actively investigating all legacy issues with a view to taking appropriate action to resolve such issues”.

“Due to the sensitive nature of those issues, it would be inappropriate for the bank to comment further on the subject matter of the question at this time,” he said.

Anglo’s accounts for the 2008 financial year indicated an after-tax profit of €664 million – but were not published until February 2009, when the taxpayer had already injected €1.5 billion into the bank in exchange for a 75 per cent stake.

Statements attached to the accounts by auditors Ernst & Young certified that the bank’s financial statements gave “a true and fair view… of the state of affairs of the parent group as at 30 September 2008″.

Current NAMA chairman Frank Daly – who was appointed to Anglo’s board as a ‘public interest director’ in December 2008 when the bank was nationalised – was the chairman of the bank’s audit committee at the time the accounts were released.


Doherty told TheJournal.ie it was “astonishing” that the auditors could not be individually identified for work “they were handsomely paid to do”.

“We all know now what the culture was within the finance sector then and while it’s not fast enough, there has been some change in the banks. There are even, finally, some people being held to account, although in a very limited way,” Doherty said.

Not so in the auditing firms. These firms are still in practice and presumably, the people who oversaw the audits, are still with them.

How is the public supposed to move on, believing that there is now transparency and honesty in the financial services, when not all those involved in bringing the sector into disrepute have been held to account, or more, forced to change their practices?

The Chartered Accountants Regulatory Board announced a year ago that it would undertake disciplinary hearings against Ernst & Young over apparent failings in the 2008 Anglo accounts.

Those failings included the auditors’ failure to detect the scale of Anglo’s loans to then-chairman Seán FitzPatrick, then-director Willie McAteer, and to Irish Life & Permanent – the latter being as part of a ‘warehousing’ arrangement designed to cast each institution’s balance sheet in a better light.

The CARB hearings have been adjourned, however, following a request from the Director of Public Prosecutions – who had expressed concern that a public hearing into any auditing shortcomings could prejudice a later criminal prosecution.

A spokeswoman for Ernst & Young said it would be inappropriate for her to comment on the circumstances of the Anglo audit while the CARB investigation was continuing.

“Apart from the ongoing CARB process itself, the firm is concerned to avoid saying anything which could prejudice the ongoing criminal investigations by the [Office of the Director of Corporate Enforcement] and the Garda Síochána into possible ‘withholding of information from the auditors’,” the spokeswoman added.

Both the Department of Finance and IBRC itself declined to offer further comment.

About the author:

Gavan Reilly

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