Sean Barrett (Independent) | Oireachtas source

I thank the Minister of State, Deputy Sherlock, for his statement. What the Minister of State Deputy Lynch said on that was that the Government had decided that Ireland should move to a model of independent inspection of the audit of public interest entities based on the model set out in the European Commission recommendation on this matter. She also said it had decided that the Irish Auditing and Accounting Supervisory Authority, IAASA, should carry out these functions instead of the recognised accountancy bodies, RABs. The RABs currently operate these functions under powers vested in them by regulations transposing various EU audit directives. The Minister of State, Deputy Lynch, said that international best practice as regards the quality assurance of audits, in particular of those companies classified as public interest entities, is that this should be carried out by public oversight bodies and not by the recognised accountancy bodies of which these audit firms are members. Public interest entities are in broad terms systematic entities, credit institutions and insurance undertakings in combination with listed companies. While it is not required by the current EU legislation that this scrutiny is an obligation, the matter is being considered under other proposals at present at EU level.

The problem with that is that scrutiny is being considered at EU level but it is not a requirement and we, however, have the worst problem. Nobody produced accounts like the major accounting firms, not just Ernst & Young, which, interestingly, has tried to change its name to EY at this stage, but all the other firms as well that audited the other banks. I do not know why nothing has been done about those procedures, which were mentioned in the IAASA annual report in 2011, but not in the latest one. The supply of information seems to be reduced so that, year after year following this problem, nobody has paid any penalties and there is an attempt to persuade us that it is a good idea that the State should take on these functions, even on the recommendation of the EU. I think the firms which committed those misdemeanours should bear the burden and there should be no question of the State bailing out anything.

The reason I tabled those amendments is that I wanted to be quite sure of that. The Minister of State, Deputy Lynch, mentioned the regulatory accounting bodies in her speech, but I do not think they are mentioned in the Bill. We must ensure the RABs have responsibility until the President signs this into law. Given their success to date at avoiding penalties and any consequences at all - many of them are still probably working for the State - somebody must say it is time the big accountancy firms performed to the standards we expect. To allow them to shunt it all to the responsibility of a quango with only 14 staff, with the entitlement to recruit another 11 staff, and which is supposed to be policing 28,000 practising accountants and 19,000 student accountants is letting them off the hook. That is my concern. I want the strictest regulation of this sector.

Accountants were not alone in causing the morass. I would rank themselves and the bankers at 95% in causing the morass. The rest of Irish society has borne the burden and the Minister of State knows it from being a popularly elected person. We did not have a consistently high standard of auditing in Ireland and it will not come in at no cost to the Exchequer. Auditing is substantially enhanced but we have not managed to get any money from the big five accountancy firms up to now; they have managed to get far more out of us. When one sups in such company one needs a very long spoon.

The success of accountants is in manoeuvring this matter without incurring any penalties for what they have done to this country for five years. It is a serious reflection on the elected people in the House, including this one, but I shall speak out against the legislation. Accountants have been getting away with it for far too long. They need much stricter regulation. They need to pay what they owe us for the appalling advice they gave us and for putting the country on the rocks. There are far too many accountants presenting each other with prizes for colour photographs in their accounts, image building, and so on with far too little accountability. I worry about a country where even accountants do not want to be accountable for their actions. We take this burden on with serious trepidation. Why are we being pressurised by the accountants? We heard as much when they appeared before the finance committee. The provision will allow them to walk away. They must send the odd cheque to the regulator but it will be nothing like what they have had to pay Mr. Coulson. We do not need EU standards but the North American standards of probity. The accountants have seriously damaged the country. Today's debate is the first chance I have had since I came to the House to point out that fact. We asked what the Chartered Accountants Regulatory Body, CARB, did but I think the answer was, "Nothing". We asked what penalties the Irish Auditing and Accounting Supervisory Authority imposed but they were minuscule compared with the damage that has been done to the country.

I ask that we protect taxpayers better than we did in 2008 and to protect them from the degradation imposed upon them by accountants in the country. That is their purpose and they must do it. They cannot walk away from those responsibilities. We must, as we will undoubtedly in the Thomas Byrne case and other cases of white collar crime, extract liabilities from the professions. Individual firms should remain liable and the costs incurred should be their responsibility.

As I said on amendment No. 14, I do not want to see the taxpayer yet again being exposed due to low standards in Irish accountancy and at risk of awards from their private clients. I am sorry that the State will not try to recoup from accountants or sue them. In cases where accountants lose against their private clients it is no responsibility of any organisation funded by the taxpayer to help them recoup losses.

I am disappointed that section 6 stands. I do not see any great urgency in it; the urgency was in 2008. We must tidy up all of the events of 2008, 2009 and 2010. We must hold people responsible for chronic under-performance and not just take it into State supervision at this late stage. Go raibh maith agat.