Please ensure Javascript is enabled for purposes of website accessibility
December 4, 2022

EY’s Postmortem Work on the Bank Suing Them Is Not a Conflict, Maybe Just a Little Awkward

As we all know, audits can only do so much. It's entirely reasonable for a large, global firm to miss a few million bucks stashed away somewhere and if the entity being audited just happens to need a government bailout to keep from bringing down the entire economy, well don't blame the auditors.

Fair enough. But what happens when the audit firm that missed hidden money ends up being the firm to clean up the aftermath? According to the disciplinary committee of the Chartered Accountants Regulatory Board in Ireland, that's not a conflict of interest or anything:

The body that regulates accountants says Ernst & Young has no "conflict of interest" case to answer following a complaint over the firm being hired to work for the former Anglo Irish Bank after it had acted as the bank's auditor before the collapse of the bank.

It followed a complaint from the directors of a business taken into receivership by two Ernst & Young partners over debts to Anglo, two years after the accountancy practice stood down as auditors of the bust lender.

The complaint centred on the view that borrowers suffered adverse consequences because they took loans from Anglo on the basis of the apparent clean bill of health given to the bank before it had to be bailed out by taxpayers at a cost of more than €30bn.

The subsequent hiring of Ernst & Young to recover those loans therefore reflected a potential conflict of interest, according to the complaint.

Oh and if you don't know this story already, the former Anglo Irish Bank — now lovingly referred to as Irish Bank Resolution Corporation after a 2009 government bailout — sued Ernst & Young for failing to discover 87 million euro worth of hidden loans. That lawsuit is still waiting in the wings but EY! stands by its work and promises to "vigorously defend" itself. We're sure they mean that.

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Related articles

EY office in Sydney, Australia

EY Reports a Rise in Naughty Behavior Now That People Have Returned to the Office

EY Oceania has released its second Value Realised Scorecard — a wide-ranging report on how the firm is doing — and Daily Mail Australia immediately latched on to page 33: Workplace Incidents: DM’s salacious headline “EY rocked by soaring number of sexual misconduct and bullying complaints as big four accounting firm workers return to the […]

help wanted sign

What Shortage? EY Is Supposedly Hiring 220,000 People This Year

According to the horse’s mouth, EY is buried under millions and millions of resumes and on track to hire nearly a quarter of a million people this fiscal year. Bloomberg: EY is on track to hire around 220,000 people in the twelve months to July 2023, having achieved its highest growth in nearly two decades […]