The second item on the agenda is consideration of a draft statutory instrument, the Companies (Auditing and Accounting) Act 2003 (Prescribed Accountancy Bodies) Regulations 2006. I welcome the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Michael Ahern, who has special responsibility for trade and commerce, and his departmental officials. He has agreed to attend today's meeting to discuss the draft statutory instrument. The regulations have been referred to the joint committee for consideration by way of Dáil and Seanad motions. The joint committee has been requested to consider the regulations and report back to both Houses no later than 8 February. I ask the Minister of State to make his opening remarks. I will then invite committee members to ask questions.
Companies (Auditing and Accounting) Act 2003 (Prescribed Accountancy Bodies) Regulations 2006: Motion.
I thank the joint committee for agreeing to consider at very short notice the draft regulations before it today. It might be helpful to begin by outlining some of the background and putting the issues involved in context.
A key provision of the Companies (Auditing and Accounting) Act 2003 concerns the establishment of the Irish Auditing and Accounting Supervisory Authority, one of the main functions of which is to supervise the way in which prescribed accountancy bodies regulate their members. I established IAASA on a statutory basis on 3 January, initially giving it powers and functions with regard to incorporation and commencement. Practically all of its remaining powers and functions will be conferred shortly. Since its establishment, I have been formally consulting and seeking the views of the six recognised accountancy bodies on the programme of expenditure for IAASA and the imposition of a funding levy on them. This process is nearing completion.
In framing and enacting the legislation I have been mindful that there are other significant accounting representative bodies whose members do not provide auditing services for companies and consequently are not recognised bodies. Accordingly, I have provided for a mechanism to bring such bodies under the ambit of IAASA — the process of prescription. I have included this provision with the intention at the appropriate time of examining a number of non-recognised bodies with a view to establishing whether they should be brought within IAASA's ambit and providing for a mechanism to do this if I consider it appropriate. Today's proceedings mark the culmination of this process. The considerations which have gone into my thinking and decision are very much in line with the views and recommendations set out in the report of the review group on auditing.
I will be pleased to answer questions.
As this relates to a technicality, the Minister of State will appreciate the nuances. As the matter was not considered by the Seanad, what we will agree to today will be subject to the approval of Seanad Éireann. It was not approved by the Seanad yesterday.
I understand the matter will be referred back to the Seanad within a week.
The clerk to the committee tells me that we were officially notified last Thursday by the Clerk of the Seanad. We must work on the basis of that official clarification.
Are we entitled to consider the matter at all, if it was not properly before both Houses?
We were officially notified last Thursday by the Clerk of the Seanad.
I am a board member of IAASA and have been involved in considering these issues for a number of years. My understanding is that the matter is properly before the committee.
Has it gone through the Seanad?
Yes. I asked that it be taken quickly. The motion of referral was put through without debate in the Seanad last Wednesday or Thursday.
We have been officially notified by the Clerk of the Seanad.
I merely wish to prevent the possibility of a legal challenge where it could be claimed that the correct procedure was not followed in this matter. The documentation we have received indicates the requirement that it be considered by the Dáil and Seanad.
The clerk has informed me that we have received official clarification from the Clerk of the Seanad.
This legislation has been extraordinarily difficult to formulate. The political story began through the work of the Committee of Public Accounts which was concerned about the way in which accountancy bodies were regulated. Arising from this is the establishment of a supervisory authority which allows the various accountancy groups to look after their own business within an oversight body. On the first day of the Enron trial in the United States it would be remiss not to take this opportunity to indicate that dealing with this issue has presented a challenge in every aspect. In his dealings with the matter the Minister of State, Deputy Michael Ahern, has always been accessible. The progress achieved would not have been made without his personal intervention.
The legislation deals with the different accountancy bodies on these islands, including the English, Scottish and Welsh accountancy groups. We are faced with a difficulty in this regard because, before we get up and running, we must attain their approval. This delay in the approval of the Irish Auditing and Accounting Supervisory Authority, IAASA, from the British accountancy bodies is something the committee may have to examine in the future. The Minister of State may have to make a unilateral decision to progress matters on that basis.
The Minister of State is accompanied by the departmental officials who have worked on this issue for at last five years. The legislation is the culmination of an effort initiated through the political process by the late Deputy Jim Mitchell through his work on the Committee of Public Accounts and Deputies Ardagh and Rabbitte who have pushed this through from the beginning. We do not often get credit politically but this is something on which progress has been made. Perhaps one more intervention is required by the Minister of State.
The Government is fortunate that the Minister of State is so experienced in this area.
I thank the committee for considering this matter. If not for Senator O'Toole, such progress would not have been made. Like him, I praise the departmental officials who have done tremendous work in a complicated area.
Following the long process of dealing with the parent Bill, I trust those handling the issue to proceed with the intentions of the Oireachtas. I have no difficulty with the prescriptions laid before us.
I made my contribution in the Seanad and I am pleased with the proposals.
I thank the Minister of State and his officials for their attendance. I wish all legislation was as easy to process as this has been. Is it agreed that we will report accordingly to both Houses? Agreed.
Messages to Dáil and Seanad.
In accordance with Standing Order 85, the following message will be sent to the Dáil:
The Joint Committee on Enterprise and Small Business has completed its consideration of the following motion:
That Dáil Éireann approve the following statutory instrument in draft:
Companies (Auditing and Accounting) Act 2003 (Prescribed Accountancy Bodies) Regulations 2006,
copies of which were laid in draft form before Dáil Éireann on 24 January 2006.
In accordance with Standing Order 67, the following message will be sent to the Seanad:
The Joint Committee on Enterprise and Small Business has completed its consideration of the following motion:
That Seanad Éireann approve the following statutory instrument in draft:
Companies (Auditing and Accounting) Act 2003 (Prescribed Accountancy Bodies) Regulations 2006,
copies of which were laid in draft form before Seanad Éireann on 24 January 2006.
The joint committee went into private session at 9.45 a.m. and adjourned at 10.10 a.m. sine die.