The Disciplinary Board on Auditors issued a ruling on 12 September 2022 on the audit of the financial statements of Danske Bank for 2014. This marks the end of the investigation initiated in October 2018 of the auditors´ discharge of their responsibilities.
By the ruling, it has now been established that EY’s audit of the bank’s financial statements for 2014 was correctly performed with the completion of sufficient audit procedures and assessments, and that the auditor's report on the bank’s annual report was correct. Moreover, EY has not committed any breach of Danish anti-money laundering legislation.
The case commenced when the Danish Business Authority opened an investigation on 4 October 2018. The Danish Business Authority filed a police report on EY for breaching the Danish anti-money laundering legislation, see the press release dated 11 April 2019. In April 2020, SØIK in Denmark (State Prosecutor for Serious Economic and International Crime) announced that the investigation was terminated as the State Prosecutor did not find ”that there was a fair presumption of any criminal offence.”
In January 2020, the Danish Business Authority brought EY before the Disciplinary Board on Auditors claiming that EY had not performed adequate audit procedures. A ruling has now been issued according to which a warning has been given for two documentary issues, i.e. issues that do not reflect criticism of the quality of the audit performed. A warning is the mildest sanction of the board. According to the explanatory notes to the Danish Auditors Act 2016, a warning is given in cases where the Disciplinary Board on Auditors assesses that the Danish Business Authority should not have brought a case before the Disciplinary Board on Auditors, but settled the case by means of a reprimand. Highlights from the ruling:
- The ruling emphasises that EY ”has performed a very substantive number of relevant audit procedures regarding Danske Bank’s annual report for 2014, including the question on money laundering.”
- The ruling resulted in a warning for the documentation of two issues subject to investigation.
- In determining the sanction, it should be noted that “the Disciplinary Board on Auditors only found that the defendants’ assessments […] were not adequately documented.”
- According to the ruling, Danske Bank’s annual report for 2014 was not subject to criticism and the auditors had performed “adequate audit procedures and assessments” in respect of suspected money laundering.
CEO of EY in Denmark, Partner and Assurance Leader in Denmark, Jan C. Olsen states:
“We acknowledge the need for investigating all aspects of the Dansk Bank Estonia case. We are satisfied with the Disciplinary Board on Auditors’ ruling marking the end of four years’ very resource-demanding efforts based on our audit of the bank’s financial statements for 2014. It has always been our opinion that the audit was performed in accordance with legislation and standards in force at that time, and EY has used extensive resources to demonstrate this to the Danish Business Authority."