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Watchdog plans irk accountants

February 16, 2011

By Staff Reporter

Eamonn Farrell/Photocall

Sen. Joe O’Toole, head of the accountant’s review group, announces his recommendations last week in Dublin.

By Andrew Bushe

DUBLIN — A new watchdog body to help regulate the country’s accountants and auditors has been proposed by a government review body set up after the all-party Oireachtas committee probe of DIRT tax evasion.

"Probably the toughest regulatory regime in the world," if the 80 recommendations are implemented, was the verdict of the Institute of Chartered Accountants in Ireland.

ICAI president David Simpson warned they could prove counterproductive and bureaucratic without real added value for business and stakeholders.

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The self-regulating ICIA is currently holding its own inquiries into members’ involvement in the DIRT scandal and the disclosures at the McCracken tribunal on payments to former Taoiseach Charles Haughey.

The report recommendations include new reporting responsibilities for directors and auditors, a limit of 5 percent for earnings from any one public company or financial institution, and 10 percent from other single clients.

Tanaiste and Enterprise Minister Mary Harney said she was impressed by the proposals from the group, which is chaired by Independent Senator Joe O’Toole, and would not "lightly disregard them."

"I would be very reluctant to ignore the fundamental recommendations of this report. There has to be change in those whole area," she said.

Harney will receive submissions over the next two months before making a decision on the recommendations, including the Oversight Board regulatory body.

O’Toole said their proposals closed loopholes and dealt with evidence of "skullduggery, non-compliance, malfeasance and tax evasion" uncovered by the DIRT inquiry.

The Oireachtas Public Accounts Committee investigation into evasion of deposit interest retention tax raised questions about the role of auditors in banks and other financial institutions.

Two judicial tribunals probing payments to politicians and public servants and alleged corruption have also highlighted the role of accountants in facilitating cash transfers.

However, the report was criticized as a "pussycat rather than a tiger" by PAC chairman Jim Mitchell, who said it contained no mention of jail and no real emphasis on personal responsibility.

"The general public is still cynical about inquiries and tribunals because they see nobody called to account," he said. I agree with the public. I think it is not good enough that an enormous amount of corruption and tax evasion has been exposed and nobody is really paying any penalty for it."

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