Terry Leyden (Fianna Fail)

The Senator said the threshold across the Border was £1 million, which equates to between €1.5 million and €2 million. That level should be set by order rather than constant changes in legislation because in ten years, €2 million will represent quite a small turnover. In fact, the turnover of a small builder, building about three houses per year, could be over the threshold set down in the Bill. If an effort is being made to discourage small companies from becoming limited liability companies, that is fair enough and according to the recommendations of the report of the review group on auditing. Many small limited liability companies have acquired very bad reputations. There have been scandals recently in which limited liability companies have been established and then gone into liquidation within a very short period, leaving an amazing number of debts.

I commend our colleague, Senator O'Toole, who chaired the review group on auditing. Its report is a weighty document. The review was carried out between February and June 2000. The group had 18 members, all of whom played a very important role. The report is an excellent research document and provided a good backdrop to the preparation of the Bill.

I congratulate the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, the Minister of State, Deputy Michael Ahern, and the Department for bringing the Bill before the House. It arises directly from the report and the recommendations contained therein. The group was established by the Minister following the DIRT inquiry of the Committee of Public Accounts to examine the regulations and professional rules governing the auditing profession. I congratulate all those involved in the production of the report.

The main function of the new Bill is to provide for the establishment on a statutory basis of an independent regulatory body, the Irish Auditing and Accounting Supervisory Authority. The IAASA has already been set up on an interim basis and has been operating in that capacity since April 2001. I pay tribute to the work of the interim authority since its establishment and I believe this legislation is a testament to its fine work in this area, based on the case it made to the Department. Contrary to what the Opposition spokesman stated, the Tánaiste acted expeditiously in establishing the interim authority shortly after the report was presented to the Government.

The powers conferred on the regulatory body in this legislation are extensive, but they are also appropriate. The principal function of the IAASA under the new legislation will be to supervise how the prescribed accountancy bodies regulate and monitor their members. In addition, the IAASA will have the power to: intervene in the disciplinary process of the accountancy bodies where it deems it necessary; carry out independent investigations in public interest cases; and apply to the courts to compel the directors of a company to amend accounts that are not in line with accounting standards. Many of those issues also arose at the ongoing public inquiries. It was felt that many accountancy firms did not carry out their duties. They will have to comply with the wishes of this organisation in the future.