Blayney Inquiry : October Comment
Author:
Brian Walsh
Understandably, the publication of the findings of the appeal committee into the Blayney Inquiry has given rise to further debate about the merits of self-regulation by accountancy and other professional bodies.
Understandably also, the debate has been coloured by the perceived failings of the Institute's disciplinary procedures in place when the Blayney Inquiry was established in 1997. By changing its own Bye-laws in 2000 to open up those procedures to greater public scrutiny, the Institute has implicitly accepted some of these criticisms. The Institute has been conducting open disciplinary proceedings since then, and like everything else that ceases to be new, they have long since ceased to be of major interest to the media.
Of greater concern though is the criticism levelled at us about matters beyond our control. The criticism levelled against the Institute about the time taken to complete the inquiry is a perfect case in point. People seem to have forgotten that Mr Justice Blayney delivered his initial report by May 2000 - two and a half years after the Committee bearing his name was established. During the course of these two and a half years the committee's work had been subject to legal challenge and had taken time to consider evidence proffered to the Moriarty Tribunal, established, like the Committee itself, on foot of the McCracken Tribunal report.
Put simply, no process internal or external to the Institute could have completed its work in a shorter period of time. Access to the courts is a right afforded to citizens by the constitution and one they will exercise. The Blayney inquiry is but one example. The Flood/Mahon tribunal has also been delayed by participants seeking recourse to the legal process to protect their rights as they see them.
Nor is it reasonable to expect that the nature of the findings be in someway related to the degree of time needed to arrive at them. Perhaps had the Blayney appeal not taken so long to complete, the expectations about the findings might not have been as great.
Commenting on the nature of the findings has been difficult for the Institute. It is a catch 22 situation for us. Had our Council investigated this matter directly we would rightly be held responsible for the findings but having established independent inquiries, we are hardly in a position to do so. The two committees that have examined these issues longer and harder than any media commentator or ICAI executive have made their findings. There were more punitive if cumbersome options open to them. More has to be read into their decision not to pursue those options than has perhaps been the case up to now.
Significantly though, these findings are the outcome of de facto external inquiry proceedings. The Institute�¢??s bye-laws now ensure that there is a majority of non-accountants on both the Institute's complaints and disciplinary committees. Rather than being wedded to narrowly defined concepts of self-regulation, the Institute has embraced the need for external supervision for some time.
Moreover, the term self-regulation conveys a misleading impression of the complex arrangements involved in the regulation of the accountancy profession. The Institute's disciplinary procedures have always been subject to external approval. The establishment of the new Irish Auditing & Accounting Supervisory Authority (IAASA) merely supersedes the role of the Department of Enterprise, Trade and Employment in this respect.
What remains of self-regulation then is of advantage to the state and the tax-payer. All the costs of the Blayney inquiry were born by the parties involved, including the Institute. The recognised accountancy bodies will fund the lion's share of the costs of the new supervisory authority. IAASA will also draw on the accountancy bodies for the necessary technical expertise to conduct its function. Were it to replicate the functions and personnel involved, the cost to the state would be considerable.
The alternative to this 'supervisory' hybrid is full state regulation. It is hardly a panacea. Interestingly few commentators on the Blayney process felt it appropriate to point out that the last ten years have revealed more considerable deficiencies in state regulation than anywhere else. The Revenue and the Blood Bank immediately spring to mind. The reality is that we have all learnt a lot in the last ten years. Ireland has changed fundamentally. So too has regulation of the accountancy profession. If criticism has been levied at the Institute over the Blayney process much of it has been based on the fact that the procedures in place before 1997 don't stand up to scrutiny in 2003. We would have no difficulty accepting that.
Brian Walsh, FCA
Chief Executive