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(Adds input from EY, fraud squad, details, background, writes through)
COPENHAGEN, April 12 (Reuters) - Accountant EY's audit of scandal-hit Danske Bank came under scrutiny on Friday as Danish authorities asked the state prosecutor for financial fraud to investigate the matter.
Danske Bank is under investigation in the United States, Denmark, Estonia, France and Britain over payments from Russia, ex-Soviet states and elsewhere. It has admitted that 200 billion euros ($226 billion) of suspicious transactions flowed through its Estonian branch between 2007 and 2015.
"In connection with the audit of Danske Bank's financial statements for 2014, EY became aware of information that should have prompted it to carry out further investigations and notified the Money Laundering Secretariat," the Danish Business Authority (DBA) said on Friday.
It did not give any further detail.
The DBA had in October launched an investigation into the external audit of Danske Bank's financial statements for 2014, as well as the auditor's duties in relation to suspected money laundering up until 2015.
The years named reflect the fact that 2014 is the furthest back money laundering can be punished under legislation that was in place until recent tightening by Danish lawmakers.
EY, which was external auditor for Danske Bank until Deloitte took over the job in 2015, said it was cooperating with the authorities.
"EY Denmark has reported as required by the then-applicable regulation and we will fully cooperate with the State Prosecutor," it said.
Danish and Estonian authorities have been heavily criticised for reacting too slowly and inadequately to the scandal that has also spread to other banks such as Deutsche Bank and Swedbank.
The head of the fraud squad, Morten Jacobsen, told Reuters the squad had received the report from the business authority and would look thoroughly into it before deciding whether there was a basis for raising a court case. (Reporting by Teis Jensen Editing by Susan Fenton and David Holmes)