Vol. 518 No. 5
5 Proinsias De Rossa asked the Tánaiste and Minister for Enterprise, Trade and Employment when she expects to receive the report of the review group on auditing established following the report of the DIRT sub-committee of the Committee of Public Accounts; if she expects to be in a position to report back to the Oireachtas with proposals for reform as sought by the committee; and if she will make a statement on the matter. [11938/00]
In deciding to establish the review group on auditing, I positively responded to the recommendation in the Committee of Public Accounts' DIRT inquiry report which proposed that a number of areas of possible reform in the auditing profession should be examined. In doing so, I took the opportunity to expand the recommended terms of reference to include the subject of self-regulation within the review group's remit. I have asked the group to report to me by 31 May next, and I hope that it will be able to conclude its deliberations on all of these issues around that time.
If the review group decides to recommend reform in certain areas, I will clearly have to examine these proposals before advising the Oireachtas of my intentions. I will make every effort to report back quickly following receipt of the review group's report.
Will the Tánaiste agree there has been almost no scandal since Goodman right up to the matters that dominate the newspapers today where the focus is not surprisingly on politicians? There has not been any scandal since Goodman in which the role of auditors is not a cause for grave concern. In the case of Goodman, for example, a company that was found to have a £550 million deficiency had had its accounts signed off without any note a few months earlier. Is this not a cause for serious concern about accounting practices?
I totally agree with what the Deputy has said. It is astonishing that so many of the matters that have come into the public domain through tribunals or inquiries were matters audited by members of the accounting bodies. It seems to me that some people think the audit is in the interests of the management rather than the shareholders and the public generally. Auditors have enormous responsibilities. It is a self-regulated profession. I favour the concept of self-regulation but if it does not work and professional bodies do not take action to discipline those members who have been involved in serious wrong-doing we will have no alternative but to go down the legislative route. We cannot have a situation where time and again accounts are audited which are totally and utterly inaccurate.
Will this review group examine the situation that might arise when companies change their auditors? Does this create an opportunity for a cartel to operate with three or four large accountancy companies moving from business to business? Accountants who offer auditing facilities are concerned that this may be the result. Can the Minister ensure that the review group looks at the implications of its decisions on the relative advantages of a large company over a small one?
It is always easy to take on the "small guy". The larger players are often much more significant and we must take them on with the same vigour.
I am told that the audit is regarded as a loss leader by accountancy firms and is often done in the interest of gaining subsequent consultancy work. The Public Accounts Committee report unravelled a great deal in this area. We must try to separate auditing from the much more lucrative consultancy work. The issues raised by Deputy Owen will be considered by the review group. The Deputies opposite are free to make a submission to the review group if they wish.
The group, which is chaired by Senator O'Toole, is working extremely hard. It meets very early in the morning every second week and has also broken into small sub-committees. I invite Members to put submissions before the review group before it concludes its work at the end of May.
Is the Tánaiste aware that accountancy firms do not need a tax clearance certificate? Accountants advise clients in acquiring tax clearance certificates and it is surprising that they themselves are not required to have certificates.
Is the Deputy referring to the need for tax clearance certificates in order to get public contracts or in order to do any work?
I mean in order to practice.
That is something we could consider. It would be a matter for the Revenue Commissioners and not for me, but the precedent which exists in other sectors could well be applied here.
Perhaps the Tánaiste could bring that matter to the attention of the review group.
I will do that.
