Oireachtas Joint and Select Committees
Wednesday, 20 May 2015
Committee of Inquiry into the Banking Crisis
Nexus Phase
Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source
Okay. Just a final area I’d like to touch on, Mr. Fitzgerald, is IAS 39, which has come up time and time again in terms of impairment provisioning. It is to tease out the wriggle room, if any, that you would have as an auditor in advising directors how to make provisions in accordance with IAS 39. My question for you is whether the application of IAS 39 is absolutist as such or whether, if you believe in the interests of making a true and fair view override as such and if you have the evidence to back it up, that a departure from IAS 39 would be warranted and could result in additional provisioning, provided you could stand over it and have the evidence? Can you explain the absolutist nature of IAS 39? And to what extent an auditor has discretion to depart from IAS 39 in making provisions for potential bad debts where he or she believes the evidence points in that direction.
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