Irish Tax Inquiry Clears Bank Auditors

by Amanda Banks, Tax-News.com

13 December 2001

PricewaterhouseCoopers and Ernst & Young, the auditors of two Irish banks forced to pay a tax bill totaling IR£111 million (£87 million sterling) earlier this year for managing bogus non-resident accounts, have been found innocent of professional misconduct accusations in the matter by a special investigation.

According to Accountancy Age the investigation was conducted by Prof Ian Percy, former chairman of Scotland's Accounts Commission, at the orders of the Irish Institute.

The article said that a parliamentary committee had originally conducted an investigation that concluded that PwC as auditors for Allied Irish Banks failed to provide in the accounts for a potential DIRT liability on the basis that the bank had agreed an amnesty with the Revenue Commissioners. But the parliamentary committee insisted that no such amnesty existed and the bank agreed to a IR£90m (£70 million sterling) tax settlement.

E&Y were auditors to the then state-owned ACC Bank, which agreed to a IR£21 million (£16.5 million) tax settlement.

However, Professor Percy has come to the conclusion that there was no basis on which any accountant could be prosecuted for any wrong doing. Deputy prime minister Mary Harney said the report revealed 'serious weaknesses in the reporting standards of the time' and confirmed that a new Irish Auditing and Accounting Supervisory Authority, would be awarded statutory status later this month.

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