Mr. Pat Houlihan:

Yes, they do. I am going through some matters of general concern. Ireland is one of a number of countries that are concerned about this matter. We are trying to elucidate the content of this bag of assorted items. We want to see what we are dealing with in the bag and decide whether we like what is included in it. I suspect we do not. I estimate that the number of public interest entities in this country under the existing definition is approximately 250. I suspect that this enhanced version could increase that number by a significant amount. That is definitely a point of concern for Ireland.

The next general concern that has been expressed at the committee in Brussels relates to the proposal for further liberalisation of the ownership rules of audit firms. Ireland is not unduly concerned about this aspect of the proposal. It is unclear whether some member states prefer the status quo because they are not keen to depart from the idea that an audit firm must be what it says on the tin - that its governing body must consist of auditors, etc. That is one of the issues that have arisen, but it is not an issue for Ireland, as such.

The next issue that has arisen relates to the role of the competent authority in the public oversight of statutory auditors and audit firms. We have an issue with the extent to which it is allowed to delegate its tasks to professional bodies. I briefly adverted earlier to the fact that the current proposal envisages approval and registration only. We would like to think we have a fairly effective system. I described its pyramidal structure at the outset. The recognised bodies regulate their members. IAASA, which is at the top of the pyramid, supervises how the process is carried out. In addition, if those functions are moved upwards, as is proposed, there will be budgetary implications for our Department. IAASA receives 40% of its funding from Exchequer resources and 60% of its funding through contributions from audit firms. If IAASA's core function is to do most or all of this stuff, people will want the Department or the Exchequer to defray all of that cost.

For practical reasons the bodies have a long tradition of regulation that works pretty effectively and we are happy enough to see that continue. A number of other member states have a difficulty with this one as well, so that would be something Ireland-----