Formal complaints against Ernst & Young in relation to its former role as auditor of Anglo Irish Bank are to go to an accountancy watchdog's disciplinary committee.
This follows an investigation carried out for the Chartered Accountants Regulatory Board (CARB) by former Comptroller and Auditor General John Purcell.
It found that there were sufficient grounds for a case against Ernst & Young over three issues. These were all linked to Anglo's first set of financial statements for the year to the end of September 2008, and E&Y's audit report on those statements.
The report said there was evidence to suggest that the firm had failed to detect the scale of former Anglo chairman Seán FitzPatrick's loans and their systematic re-financing over a number of years.
Mr Purcell also said there is evidence to suggest that E&Y failed to refer in its audit report to back-to-back deposits of €7.45 billion from Irish Life & Permanent which artificially improved Anglo's accounts in 2008.
The report also suggested that E&Y failed to ensure the appropriate disclosure of a loan to former Anglo director Willie McAteer in the first set of Anglo's 2008 financial statements or its audit report. These issues will now be referred to the CARB's disciplinary panel.
Ernst & Young said it "fundamentally" disagreed with the report's findings on the three issues. It described this as a preliminary stage of the process, adding that it would "vigorously defend" its work at the disciplinary panel.
Mr Purcell found that E&Y had no case to answer in relation to a number of other issues, including the "Maple 10" loans to ten of Anglo's customers to buy shares in the bank and certain loans to four of Anglo's management team.
