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Public watchdog says Central Bank must tighten up auditing standards

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — Despite a 10-year-old legal requirement that external auditors report on deficiencies in the internal controls of financial institutions, or suspicions of any impropriety, not a single report has been made to the Central Bank, according to the public-finances watchdog John Purcell.

A report from Purcell, who is comptroller and auditor general, comes in the wake of the DIRT tax investigation, which found widespread problems in banks and building societies with bogus offshore accounts being used for tax evasion.

"The Central Bank has latterly accepted the need to give more attention to professional standards and ethics and is seeking the submission of a code of ethics from all banks and building societies."

Targets for inspections and reviews of the institutions by the Central Bank had also shown a "significant shortfall" in recent years.

Purcell’s study also found the Bank’s protection of consumers was less strongly focused on banks and building societies than its control of investment institutions.

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The report comes as Tanaiste Mary Harney and Finance Minister Charlie McCreevy consider whether a new regulatory authority should take over some of the functions of the Central Bank.

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