According to Brian Coffey, president of the Institute of Certified Public Accountants in Ireland, the impact of over-regulation is such that ‘we are moving ever closer to a scenario where the risks involved in an audit will far outweigh the return to professional firms’. That was not in the interest of business or of shareholders.
Speaking at the president’s annual dinner in Dublin, he said it was ironic that ‘corporate fraud in Texas can add up to 60% to the professional indemnity insurance of a sole practitioner in Ireland’. No business could carry that cost on its own, and he warned that audit fees for Irish companies were set to increase because of this and the new legislative requirements placed on auditors.
Coffey was critical of directors’ ‘low or non-existent level of awareness’ of what constitutes an indictable offence under company law, and called for a public information campaign to minimise unintentional breaches. The auditor, he said, was currently faced with the task of educating his clients on what was an indictable offence – and then of reporting them.
The institute represents over 2,300 accountants in public practice and industry, plus 1,500 student members. In a message to government, Coffey called for better consultation with the profession before the introduction of new legislation.
‘There is a severe danger,’ he warned, ‘of over-regulating the profession on an ad hoc basis without putting sufficient thought into what needs to be achieved and how best to achieve it without wrapping businesses up in red tape.’
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