[Fulltext] Internationally, the year was dominated by Enron and the other US corporate scandals which followed. The implications of this have been massive. In the United States we have had the Sarbanes-Oxley Act rushed through in order to calm capital markets, and in the UK a major review of the regulatory structures of the accountancy profession is being undertaken only one year after they were put in place. The extent of the Sarbanes-Oxley impact can be judged from a tele-conference which this Institute was involved in just after the legislation had been passed. There were participants from New York, Toronto, Wellington, Sydney, Hong Kong, Capetown, Rome, Paris, Berlin and London. In all of those jurisdictions it was front-page news and politicians were grappling with how they should respond.
To the vast majority of our members, however, Sarbanes-Oxley has no relevance. General practitioners are ending this year absolutely exhausted. The main causes of this have been changes in procedures in the Companies Registration Office and the shortened tax year. On top of that, there was new legislation introduced with the Company Law Enforcement Act, which imposes new reporting obligations on auditors, and massive increases in professional indemnity insurance, which had to be met. General practitioners are feeling unappreciated at present. They keep the tax system going, they fill the information gap between what a company director should know and actually does know, and, as they see it, all they get in return is more changes and more regulation. We believe some of these pressures could have been avoided if there had been more consultation with the profession. Lessons have been learned by all concerned and, hopefully, we will not have a year like this again.
Although it may not be obvious from the outcomes, the Institute worked hard this year to represent the interests of its members. Representatives of the General Practices Committee have met with the Companies Registration Office, as a result of which some changes have been, and will be, made to procedures which will make them more user friendly. The CRO has acknowledged the importance of the role played by practitioners in the filing of company returns, and has agreed to the establishment of a separate CCAB-I representative group which will articulate the views and concerns of practitioners to them. I am confident that structures have now been put in place which will ensure a continually improving relationship between the CRO and practitioners.
Our representatives on the Taxation Committee and TALC worked hard to lessen the burden of dealing with the short tax year, but it was always going to be an uphill battle. The only positive thing which can be said about that is that practitioners will not be facing a mountain of work after Christmas, and next year should not be as bad.
On the legislation side, a huge amount of work was done in developing a Bulletin (Q30) which dealt with Auditors' Reports to the Director of Corporate Enforcement under Section 74 of the Company Law Enforcement Act 2002. This was adopted and issued by the Auditing Practices Board and also by the Office of the Director of Corporate Enforcement itself. Practice Notes 19 and 20, giving guidance on the application of Auditing Standards to the audit of banks and insurance companies respectively in the Republic of Ireland, were also developed by the Institute and endorsed by the Auditing Practices Board.
The Interim Board of the Irish Auditing & Accounting Supervisory Authority (IAASA) has continued working throughout the year and, as it comes to a close, we are awaiting the imminent publication of a Bill to legislate for the recommendations of the Review Group on Auditing. The Institute is supportive of the general thrust of the legislation and the CCAB-I representatives on the Board have worked hard to ensure that it will be workable, but we will suspend judgement until we see the final Bill.
I doubt if there is another profession with membership interests of such diversity as ours. We have members with practising rights in two jurisdictions, in very large and small practices, in plcs and SMEs, in public utilities and academia. What may be of huge importance to one section, may be of no relevance at all to another. This creates great challenges for the Institute in remaining relevant to all its members, but you can be assured that we work hard to do so.
A difficult year, but onwards and upwards.
Brian Walsh
Accountancy Ireland, Vol. 34, No. 6 December 2002.