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To say that we live in turbulent times is an understatement. It is now apparent that the extent of the worldwide banking crisis and economic downturn is worse than first imagined. In economic terms, we have been hit by a perfect storm with a deepening recession, a collapse in consumer confidence, increasing unemployment and, in consequence, public services under threat. No-one could have predicted the extent to which Governments worldwide have been forced to intervene to protect the financial sector and the wider economy and whilst the Governments in the UK and the Republic of Ireland are responding differently, they both face similar challenges. At this point it is far from certain that these measures will be wholly effective and this in turn adds to the mood of uncertainty and fear.

For our profession the challenges are considerable. In the short term, we need to work to minimise the impact of the downturn and credit crisis on our own businesses and those of our clients. I believe that our members have a key corporate social responsibility role in working with Government, its agencies and the business community to sustain jobs and businesses during difficult times. In accepting this responsibility, we need to be resourceful and adaptable, whilst being mindful of the standards of behaviour that have defined our profession since its inception.

There are a number of specific areas which I wish to highlight. One of these is the ‘going concern’ basis on which most financial statements are prepared, which has now become a significant issue of judgement for directors and auditors. In response, ICAI has been working to help directors and others understand the key challenges around going concern and to ensure that any appropriate disclosure of significant uncertainties and ‘emphasis of matter’ statements made by auditors are understood in their proper context.

A related issue is the nature of the audit itself and an apparent continuing expectation gap about the role and work of the auditor. We need to educate users and the wider public that an audit is dependant on the truthfulness and accuracy of information provided to the auditor and that it can never be a guarantee of either share price or business success.

I believe that the principle of ‘good governance’ needs to be reassessed, particularly in light of apparent shortcomings in regulatory and governance arrangements in the financial sector worldwide. As I said in a recent issue of the Ulster Society ‘Spreadsheet’ magazine: “Good governance is more than just structures, procedures and codes of practice. It is about individual Directors (both executive and nonexecutive) and senior managers understanding fully the organisations, activities and controls for which they are responsible, securing the full range of information needed to oversee the running of the business and applying the appropriate level of challenge – including a proper awareness of the risks which could impact on the future survival of the entity.”

It is not unreasonable to assume that at some point in the future, this recession, like those of the past, will come to an end. Perhaps the coming to office of a new President in the United States will represent the turning point and a light out of the darkness. It is a heavy burden of expectation on one individual, but we wish Barack Obama well.

In 2007, ICAI established an operationally independent regulatory body, the Chartered Accountants Regulatory Board (CARB), to conduct our regulatory and disciplinary functions. I believe that the wisdom of that decision is already becoming clear.

Recently, CARB announced its intention to examine matters at Anglo Irish Bank and the role played by any of our members. I welcome this announcement and have no doubt that CARB will undertake its examination thoroughly and in a manner consistent with the Bye-Laws. Respecting the processes and procedures which have been established to permit CARB to operate independently, we must now allow CARB to carry out its duties, in conjunction with IAASA and other supervisory authorities.

As President of this Institute, I know there are many members who are disappointed and angry at the developments at Anglo Irish Bank, even as we know them. In the face of intense media interest in this issue, there is an unfortunate but real risk that such public criticism is taken as a comment on us all. Personal and professional reputations are hard won and easily lost and I believe that it is incumbent on each of us to remember at all times that we carry with us the reputation of others.

Jim Aiken, FCA President