Dáil Éireann debate -
Thursday, 17 Oct 1991

Vol. 411 No. 2

Written Answers. - Company Fraud Reporting by Auditors.

Ivor Callely

Question:

44 Mr. Callely asked the Minister for Industry and Commerce if he will outline the progress which has been made in making provision in company law legislation to allow auditors report on specific areas which could give rise to fraud without a breach of confidence in terms of auditor/client relationship; and if he will make a statement on the matter.

Minister for Industry and Commerce (Mr. O'Malley)

Membership of a reorganised accountancy body is the most usual manner in which a person attains qualification to practise as an auditor. Such accountancy bodies require that their members act in a professional manner through compliance with bylaws, codes of conduct, auditing guidelines and such like. These offer guidance to members on appropriate modes of conduct, including the auditor's responsibility in relation to fraud, other irregularities and errors. There is no provision in company law which would preclude the reporting by auditors of fraud or suspected fraud to the appropriate authorities.

Under the provisions of section 191 of the Companies Act, 1990 it will be necessary for each accountancy body seeking recognition thereunder to satisfy me as Minister that the standards they apply to their members in such matters as ethics, professional integrity and technical standards are satisfactory. Moreover, section 192 of the same Act provides that I, as Minister, may require a, recognised body of accountants to submit for approval a code prescribing standards of professional conduct for their members. In this way, the guidance given to members of recognised accountancy bodies, if necessary can be tailored to meet practical situations which arise in relation to auditing.