Former Ireland Comptroller and Auditor
General John Purcell has been appointed as a special investigator
to examine the accounting profession’s involvement in the decline
of recently nationalised Anglo Irish Bank.
The bank’s chairman, Sean Fitzpatrick, and
chief executive, David Drumm, resigned in December after the bank
revealed Fitzpatrick had concealed €87 million ($111 million) of
loans from the bank.
The Irish government took ownership of Anglo
Irish in mid-January to prevent its collapse.
The complaints committee of the Institute of
Chartered Accountants in Ireland’s (ICAI) regulatory arm, the
Chartered Accountants Regulatory Board, has now appointed Purcell
to investigate possible breaches of ICAI bye-laws and rules of
professional conduct by its members and member firms in relation to
the events at Anglo Irish.
Under specific investigation will be the loans
made by Fitzpatrick, and the subsequent resignations of him, Drumm
and bank director William McAteer. All three are members of the
ICAI. Purcell will also investigate the performance of the bank’s
auditors Ernst & Young Ireland.
The Big Four firm issued a statement in
January saying all its audits conducted for Anglo Irish Bank
shareholders were undertaken in accordance with the appropriate
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“Ernst & Young is confident of all audit
opinions expressed to Anglo Irish Bank shareholders in the bank’s
financial statements and that the accounts show a true and fair
view of the state of affairs and results of the bank in accordance
with the information and explanations received,” the firm said.
“As part of the normal audit process Ernst
& Young received certificates from directors setting out their
loan balances with the bank at the end of the financial year.
“Until late 2008, Ernst & Young was
unaware of the refinancing transactions undertaken by the former
chairman of the bank which concealed the extent of his loans with
the bank during previous years.”