The world of corporate governance has changed dramatically since the demise of Enron. Initiatives such as the US Sarbanes-Oxley Act, the EU High Level Group of Company Law Experts Report, the UK’s Smith and Higgs reports and international moves towards harmonisation of accounting standards are transforming the status quo.
Similar developments have taken place in Ireland, the latest of which is the Irish Companies (Auditing & Accounting) Bill 2003. The Bill addresses many of the themes tackled by the EU, UK and US initiatives and had its genesis in a domestic scandal that occurred prior to Enron. In 1999, the press reported that a leading Irish bank was holding bogus non-resident deposit accounts for Irish resident customers so that Deposit Interest Retention Tax could be avoided. It was subsequently established that more than 20,000 such accounts had been administered by a number of Irish banks and building societies. To date the tax authorities have recovered more than E550m (£377.8m)in charges and penalties arising from the existence of these accounts. An Irish Parliamentary Committee was established to examine auditing and compliance issues in the wake of the scandal and recommended that a Review Group on Auditing be established to look into auditing and compliance issues. The new Bill implements the recommendations of this review group.
