Irish Auditors Play Key Role In Corporate Governance Reporting

by Jason Gorringe, for LawAndTax-News.com, London

12 January 2005

In a statement released on Monday relating to the recently published report from the Office of the Director for Corporate Enforcement (ODCE), president of the Institute of Chartered Accountants in Ireland, Terence O'Rourke drew attention to the large portion of the reporting burden shouldered by the Republic's audit profession.

In its interim report, the ODCE announced that:

"Overall, the number of cases of possible corporate misconduct on hand within the ODCE in 2004 increased by over 12% from 2,104 to 2,363. Over 1,950 of these were new cases, and about 80% of these came from auditors reporting suspected indictable offences under the Companies Acts. The balance came mainly from members of the public who were concerned principally about the management of company affairs."

Commenting on the figures, Mr O'Rourke suggested that:

“There is an undeniable emphasis through this report that more activity on the part of the ODCE is worthwhile. As the Director seeks to account for his office’s activity and expenditure levels, this is understandable. But, in this case the opposite should apply. Genuine success will be when the ODCE reports less, not more activity."

He continued:

“These findings confirm the trend that emerged during 2003 following the agreement of guidance between the ODCE and the professional bodies. It gives the lie to those who suggest that auditors are part of the problem rather than the solution. There is no way that the ODCE could work without the support of the accounting profession and it is appropriate that this should be acknowledged."

However, the ICAI president drew attention to the large reporting burden that falls on auditors from other sources as a result of the Republic's tax, money laundering, and criminal justice legislation, and suggested that the profession's obligations need to be reduced or simplified.

"These figures from the ODCE prove that auditors are playing their part – there is a corresponding onus on legislators and regulators to respond by making the auditors' duties clear and coherent,” he concluded.

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