TODAY’S – Turkish bank warns Ernst and Young over financial auditing

Turkish bank warns Ernst and Young over financial auditingBank Asya shareholders have issued a written warning to independent auditing firm Ernst Young, saying the firm lacked sufficient reason not to comment on financial statements drawn up by the bankand#39s interim board, which are alleged to be flawed.Ernst Young had presented several reasons as to why it opted not to comment on the statements, but Bank Asya shareholders declared them to be insufficient.

The shareholders said Ernst Young, which had expressed a positive opinion when it had monitored the balance sheet of the bank and its affiliates in the previous two years, had avoided commenting on the bankand#39s 2014 balance sheet and that this was not acceptable. andldquoThis [Ernst Young abstaining from comments] is against Turkish laws regulating the banking industry,andrdquo the shareholders said.

Last week Bank Asya, whose management was taken over by regulators earlier this year, said it posted a net loss of TL 877 million ($336 million) in 2014 on shrinking loans and deposits. In a written statement, Bank Asya shareholders said the financial results were released without bearing the signatures of the bankand#39s board members or CEO.

andldquoThis breaches the related law regulating the Turkish banking industry and is a first in Turkish history,andrdquo said the shareholders in a statement released on Tuesday.The shareholders said the interim board failed to provide a written report to an independent monitoring company before releasing the bankand#39s 2014 financial results.

They said the interim board cited the fact that there were ongoing studies of the financial report as the reason for not consulting an independent board and thus Tuesdayand#39s release was made prematurely.andldquoOddly enough, the independent auditing firm, Ernst Young, which had monitored the balance sheet of the bank and its affiliates for two years and expressed a positive opinion of them, avoided commenting on the bankand#39s balance sheet during this period,andrdquo the shareholders said in Tuesdayand#39s statement.

President Recep Tayyip ErdoIan has waged a campaign to sink Bank Asya, which was established by affiliates of the Islamic scholar Fethullah Gulen-inspired Gulen movement, also known as the Hizmet movement. Since early 2014, the government has made a series of attempts to weaken the Islamic lender, most recently seizing 63 percent control of its management in February.

SOURCE: Today’s Zaman