Examiner to probe role of auditors

A SPECIAL examiner is expected to be appointed “within the next two weeks” by the Chartered Accountants Regulatory Board (CARB) to oversee the body’s planned investigation into the role played by leading accountancy firm Ernst & Young in the directors’ loans controversy at Anglo Irish Bank.

The CARB said earlier this month that it was planning an investigation around the practice of “hiding” the loans with the Irish Nationwide Building Society. It is thought the investigation will focus on the role played by Anglo’s auditor, Ernst & Young, not KPMG, which audits Irish Nationwide’s accounts.

The appointment of a neutral special investigator was deemed necessary. Once the investigation gets under way, it is thought the probe will run for months rather than years.

Ernst & Young has already turned down an invitation to appear before a Joint Oireachtas Committee hearing on the issue, but said, after Anglo’s extraordinary general meeting last month that all of the audits carried out “were undertaken in accordance with the appropriate auditing standards”. It made no further comment yesterday.

Meanwhile, this week’s fresh revelations concerning Irish Life & Permanent’s €7 billion deposits into Anglo last year, in order to boost the latter’s balance sheet around the time of its last audit, led small firms lobby group ISME to reiterate its call for the Financial Regulator board to be sacked.

ISME chief Mark Fielding said otherwise the Irish financial system was in danger of losing all credibility.