Ms Josephine Feehily:

This is a case in which I need to be careful because in such cases those concerned can identify themselves. The Comptroller and Auditor General is correct that there is evidence of a lack of rigour and transparency in the way the case has been handled. Again, it has been reviewed and whereas considerable rigour was exercised by the auditor in question, it was not documented. The Comptroller and Auditor General acknowledges the considerable rigour in discussing the matter with the Revenue anti-avoidance network, but there is no evidence of the discussion having taken place. I have had somebody look at the case to ensure this discussion did take place.

I need to stand back from the case studies - cases A and B, which are the same in many respects. Round sum settlements were reached in cases that involved hugely complex issues; in one case everything was properly documented, whereas in the other it was not. In these cases we are trying to put ourselves back into the position of an auditor who takes advice and in the context of that advice, the probability of success in litigation has to be assessed. When one is dealing with complex issues, one never knows who will win. I discussed such an issue with Deputy Paul Connaughton and how many years it would take. We have an approval system in place and that settlement was approved. In reaching it, the auditor in the case also secured a commitment which restricted losses.

The impact of the loss restriction would have brought us back up to €22 million, if not more.

We have the legislation, we have the code of practice which is transparent and available for everybody to see, we have our quality guidelines and our approval processes. We have to trust our staff to use their judgment, to use those frameworks and to come to a settlement. That is what happened and is what auditors do.