Address by Minister for Trade and Commerce Mr. Michael Ahern T.D., To the Institute of Chartered Accountants in Ireland Practice Conference

Good Morning ladies and gentlemen. I am delighted and honoured to be here this morning to deliver a short introductory address at your Institute's General Practice Conference - which I am sure will be a thought-provoking day for all here present. I thank you most sincerely for inviting me here today to address ICAI's members in practice.

The conference, I understand, is organised, to provide practitioners with time-out from their busy schedules to network in a friendly environment with contemporaries, to examine practice issues and avail of the guidance of some of the most influential and important thinkers in the delivery of client-focussed service.

From your Conference Programme, I see such prominent speakers as Cahal Dowds - who will give you the benefits of his experience in building and then selling a successful practice, others such as Dr David Maister - the guru of professional service delivery, will lead you through the secrets of successful client relations and business development, while Des Peelo, Ireland's expert on valuation of practice, will provide some guidance on problems, perils and opportunities accruing, and Adrian Burke - the current President of the Institute will, I'm sure brief and inspire you with his questions and answers.

The Conference will also provide members with an opportunity to update and maintain their professional competences through the Continuing Professional Development Programme. The Institute has always been striving for excellence in terms of standards of professional services and, in this age of information explosion and rapid changes in technology, trade and the environment, the need for continual professional up dating is supreme. As we all know, any profession, regardless of its specialisation, is tasked with ensuring their knowledge and skills are up to date. The increasing pace of change in the environment in which professionals operate makes it increasingly difficult for such professionals to remain at the leading edge in terms of competence unless they are prepared to update their skills and knowledge on a continual basis.

The ICAI have their own guidelines for members, whereby, they are required to show proof of their continued learning and development as a condition of maintaining membership. The underlying ethos is the commitment by the individual to take steps to learn and develop in order to continuously meet the demands of their profession. To meet these challenges and to maintain the quality of their brand, professionals must continually renew their professional competence and re-equip themselves with new skills. In order to fulfill the requirement of the Institute, members must take ownership of the whole process from identifying future trends and training needs to identifying suitable development activities, which should enhance not only the individual, but also the profession in which he or she is employed. This is something I wholeheartedly support.

As we all know, the challenges facing all professions has increased greatly over the last number of years, but the challenges facing the accountancy profession are particularly onerous and paramount. These challenges come from many directions - developments in information technology, globalisation of trade, new corporate governance practices and new regulatory requirements.

It has become increasingly clear, however, that an environment that facilitates and encourages risk taking is not one without rules and regulation. The recommendations of the Working Group on Company Law Compliance and Enforcement sometimes known as the McDowell Report brought into focus the need to enhance the standards of corporate governance in Ireland. The Group found that Irish company law had been characterised by a culture of non-compliance and by a failure by companies and their officers to meet their obligations under the Companies Acts. This prompted the Government into implementing a number of measures to promote and increase corporate governance. The Office of Director of Corporate Enforcement was established in 2001, with the main provisions in the Act flowing directly form the recommendations in the Report of the Working Group on Company Law. One of the main functions of the Director is to encourage compliance with the Companies Acts and bring to account those who disregard the law. The Director has extensive powers in relation to investigation, prosecutions and enforcement. This new legislation has been found to be necessary to ensure that companies are run effectively for the benefit of the community at large - who extend a huge privilege to them by allowing them to establish with limited liability.

The new obligation that requires auditors to report to the Director of Corporate Enforcement where they have reasonable grounds for believing that a company, or an officer or agent of a company has committed an indictable offence under the Companies Acts has been highlighted most by Auditors. Comprehensive guidance to assist auditors in complying with their reporting responsibilities to the Director of Corporate Enforcement was published jointly by the Office of the Director of Corporate Enforcement, the Auditing Practices Board and the Consultative Committee of Accountancy Bodies in Ireland. Good corporate governance ensures that companies take into account the interest of a wide range groups within the communities they operate in and this in turns will helps and benefit society as a whole.

Another area that has undergone major changes over the last few years is the Auditing and Accountancy profession. Flowing directly from the recommendations of the Report of the Review Group on Auditing - a new Bill was drafted which provides for the establishment on a statutory basis of an independent regulatory body, the Irish Auditing and Accounting Supervisory Authority (IAASA). IAASA will be independent of the profession while, at the same time, having at it disposal all the necessary expertise required for effective regulation, that will ensure that the auditing and accounting professions operate at the very highest standards. The new Bill is presently before the Séanad. The Bill proposes to fundamentally reform the regulation of, and the rules governing, the auditing and accounting profession. It will ensure that Ireland's business regulatory system will be on a par with the best international standards, commands public confidence and international respect.

The Authority will be given significant powers to discharge its functions and will have its own dedicated professional and administrative staff. It will have the power and resources to:

??Intervene in the disciplinary process of the accountancy bodies where it deems it necessary;

??Investigate directly cases of pubic interest;

??Apply to the courts to compel the directors of a company to amend accounts that are not in line with generally accepted accounting standards;

??Require accountancy bodies to amend their ethical rules and their disciplinary and investigation procedures;

??Grant recognition to bodies of accountants under the companies Acts;

The central objective behind this new auditing legislation is to ensure that the regulatory structures governing auditors and accountants in Ireland meets with the best international practice.

I would hope that the Bill will become law during the Summer or early Autumn of this year.

The integrity of corporations, financial institutions and markets is central to the health and stability of the Irish economy. We need to be vigilant to ensure that financial standards, regulations and methods of market surveillance are effective in maintaining investor confidence and protecting the interests of shareholders and stakeholders. Auditors in practice and accountants in industry have a vital role to play in ensuring this integrity of corporations.

In conclusion, I wish to acknowledge the vital role the accountancy profession plays in the Irish economy and its major contribution to the industrial and commercial life of the country. And finally, I wish to thank you once again for affording me this opportunity of address you members here today and I wish the Institute and all its members every success in the future.