Sean Barrett (Independent) | Oireachtas source

I move amendment No. 4:

In page 13, between lines 6 and 7, to insert the following:"(9) The Irish Auditing and Accounting Supervisory Authority shall report annually to the Oireachtas Committee on Finance, Public Expenditure and Reform on oversight and compliance in the audit sector, the ability of the sector to bear the costs of inadequate quality assurance standards and the adequacy of penalties for breaches of such standards.".

We are also working against a backdrop where we have been seeking to have the Oireachtas address certain accounting practices since at least 2008. People outside the House want us to introduce this measure. As I stated, important tasks of supervision in the area of audit and accounting have been neglected as a result of the work the Government and Oireachtas has been required to do. Some matters have been held up by the Director of Public Prosecutions and certain court cases are not due to be heard until next year.

We need to bring this matter into the public arena, a view that is shared by Ms Helen Hall, director general of the Irish Auditing and Accounting Supervisory Authority, IAASA. Ms Hall notes in the latest IAASA annual report that accountants' work is being inhibited and states the following:

These confidentiality provisions have had and continue to have an adverse impact on IAASA's advocacy role. We have had initial discussions with the Department on this matter and plan to engage further in 2013. The intention is to explore amendments to these confidentiality provisions as part of IAASA's consideration of the Companies Bill 2012, with a view to striking a balance between the protection of confidential information provided to IAASA and the desirability of transparent reporting on IAASA's activities.

The 2012 reports subsequently states: "For example, we view the provision of information on the results of our financial reporting examinations, without necessarily identifying the name of the issuer involved, as assisting in building an awareness of, and confidence in, financial reporting." As the Minister is aware, this goes back to 2008 when these problems struck the country. Ms Karen Erwin was chairperson of the Irish Auditing and Accounting Supervisory Authority at the time.

She stated in her annual report that what was happening increased risk levels and, in turn, significantly increased the risk of serious and lasting damage to public confidence in statutory financial reporting and the accountancy profession. I do not think the good reputation of the accountancy profession has been restored. The profession feels it is inhibited by section 31 of the legislation, which prohibits disclosure and discussion. The report contains redacted sections. It is like a red rag to a bull for Members of the Oireachtas to be given documents that are redacted. How are we supposed to make decisions? The Milliman report on the health insurance sector contained 55 vital sections that were blacked out. That is an insult to our democracy on the part of those who did the redacting.

Three prima faciecases are being pursued against one accountancy firm in regard to Anglo Irish Bank. The report of the commission on banking referred to the low standards observed in accountancy practices at the time. The Minister of State had to remove these sections from the Companies Bill, which while admittedly complex and lengthy is moving very slowly. I think it has been in gestation for three years at this point. We are moving this amendment in view of the cost to the economy of what has happened in Irish accounting, the slowness of the procedures and the extremely light penalties imposed thus far. In the last six months, six fines were imposed for an average fine of €1,500. The average costs in seven cases were €3,870. There were eight reprimands, of which four were severe and four were not severe. In view of the €64 billion we put into the banks on the basis of accounts prepared by these accountancy firms, which we read into the record on a previous occasion, Parliament has to respond in a more urgent way to ventilate the issue. The probable basis for all the troubles this economy has encountered is that we bought banks on the basis of the accounts which the Minister for Finance and his successors found to be inaccurate.