I would like to thank you sincerely for your invitation both to this lunch and to address you all here today.

As you know, our Department, of Enterprise, Trade and Employment, under the Companies Act 1963-1990, has wide ranging responsibilities. These apply to the regulation of company affairs as to accounts, meetings, directors, members, and the general conduct by companies of their business under the law of this land. This legislation has been found, over time, to be necessary to ensure that companies are run effectively for the benefit of the community at large. It is necessary also to ensure that the law applies equally to all sections of society.

The Companies Acts, provide for both the regulation and control of auditors. At present the profession is self-regulated. The CPA is one of the accountancy bodies recognised by our Department for this purpose. Your Institute is required to report to our Department on an annual basis on its activities particularly in respect of investigations into complaints concerning members and the nature of the sanctions taken against your members when the need arises.

While I accept that an auditor has a difficult role to play I also consider that the profession has to ensure that its members maintain the highest standards possible. This has not always been the case particularly in the recent past. Recently the Tánaiste and I have announced new initiatives to achieve better enforcement of Company Law. In August last we established a Working Group on Company Law Compliance and Enforcement.

I note your references to the recently published Report on Company Law Compliance. Thank you for your commendation of the recommendations of that Report. You should know that we have already started working on the issues for legislation. The new Companies Bill, published earlier this week, will commence its parliamentary passage presently

The Company Law Group was established because of the Government's concerns at the emerging indications of serious abuses of company law. The working group has now issued its report and it has confirmed our fears as to the low level of compliance with company law and the extent to which company law is being enforced in Ireland. For example, the Group found that in 1997, only 13% of the 136,000 companies due to file their returns on time actually complied with their obligations. The Group also found that most statutory offences have never been the subject of prosecutions, and those which have been prosecuted have resulted in only a handful of convictions. The Group concluded that those who are tempted to undertake serious breaches of company law have little reason to fear detection or prosecution. This low compliance rate for the filing of annual returns on time, which is a basic corporate duty, indicates to us that the law is honoured by business more in the breach than in the observance.

The Working Group made a number of detailed recommendations for changes in Company Law and the manner in which company law is enforced. The Government has made a very positive response to these recommendations. One of the proposals by the Working Group was the establishment of a new Office of Director of Corporate Enforcement. As an indication of how seriously the Government is treating this matter, it has gone beyond the recommendations of the Working Group, and has decided to transfer from our Department of Enterprise, Trade and Employment to the new Director, primary responsibility for future Company law investigations.

The principal powers and functions of the Director of Corporate Enforcement, will be as follows:

• the prosecution of summary offences under the various Companies Acts;
• assisting in the preparation of cases for the prosecution of indictable offences, under the Companies Acts, by the Director of Public Prosecutions;
• the power to petition the High Court to appoint inspectors to investigate the affairs of particular companies, to directly appoint inspectors to establish the beneficial ownership and control of shares in a company and to appoint authorised officers to examine the books and records of any company;
• seeking injunctions against companies, their directors or other persons in order to secure compliance with the Companies Acts;
• applying to the Courts, under sections 150 and 160 of the Companies Act, 1990, for the restriction of directors and the disqualification of persons who act as company directors or other officers or promoters or who discharge important roles such as auditors, examiners, liquidators or receivers of a company; and
• exercising a limited supervisory role over the activity of liquidators in the discharge of their duties under the Companies Acts, also.

  Our Government will also provide the necessary staffing resources, for the new Director's Office, which will comprise of a dedicated multi-disciplinary team of 30 staff, with the resources and expertise to enforce comprehensively Company Law in all its aspects. In addition, the Government have agreed to the allocation of 7 members of An Garda Siochana to work with the new Office on Criminal Prosecutions.

The Working Group also recommended that a Statutory Company Law Review Group should be established. Our Government has agreed with the Group's recommendation that there should be a reforming Companies Bill every two years to cover the Review Group's recommendations and any other matters that are arising. Our Government will also provide the necessary staffing resources to the Statutory Review Group and it will be supported by a staffing complement of 10 people. The purpose of the Review Group will be to examine and make recommendations for reform in particular areas of Company Law. Pending the enactment of the necessary legislation, the Group will be established initially on an informal basis.

The Working Group identified the need for a complete consolidation of all Company Law. This will begin to be addressed with the additional staffing being provided to our Department as a matter of priority. As this will be a major task, involving the consolidation of both primary and secondary legislation, it will be undertaken in parallel with the work on a Biennial Company Law Bill.

While there is an ongoing need to improve on the work carried out by the profession I would like to recognise the work being carried out by the Institute. As a professional body, your Institute operates to extremely high standards. These standards are underpinned by section 191 of the Companies Act, 1990 which requires the Minister to be satisfied, in recognising a body of accountants, that it has satisfactory standards in the areas of ethics, codes of conduct and practice, independence, professional integrity, technical standards and disciplinary procedures.

With regards to this general issue, you will be conscious that Moriarty Tribunal has been asked to make recommendations in the area of effective regulation of the conduct of their members by professional accountancy bodies. I should say that my Department is in the throes of preparing its own submission on this and other matters for transmission to the Tribunal in due course.

As regards the issue of "level playing fields" in respect of liquidators and receivers, I know that this is a live issue. At 31 December last there were 5,384 companies in the course of liquidation with 780 companies in receivership. Last year one liquidator was convicted under the Companies Acts for failure to call creditors' meetings and for failure to file statutory returns. I would hope that all professionals engaged in this sensitive area would be conscious not only of their statutory obligations but also their responsibilities in the widest sense to creditors to undertake these assignments with care and expedition.

Once again I would like however to refer to the work of your Institute and the high standards that it maintains. A body such as this, can prove its worth by giving its members the opportunity for a good deal of data to be available at a central location for individuals to research and extract whatever their requirements are. I am also aware that you assist your members by conducting ongoing professional education. It is so essential for professionals such as auditors and accountants who are required to act for their clients and who are required to give advice to keep abreast of current developments. This is not always easy and at times can be extremely difficult. While the current trend to speedier communication of events on a global basis is to be welcomed, the additional information available has then to be assimilated. Your assistance to your members therefore can be invaluable.

There is a major current issue which I would like to mention, as I consider it to be of extreme importance and very relevant to the work of the Accountancy profession. This is the Year 2000 computer problem with which I have been closely involved .

As far as the Government is concerned, our involvement in this problem is twofold. Firstly we have been organising a campaign to make business aware of the problem and secondly we have a responsibility to put the Government's own house in order so that the huge range of services provided by the State will be unaffected into the new Millennium.

The critical aspect is business awareness. It was apparent that many businesses around the country were unaware of the issues involved. To tackle this deficit I established a Year 2000 Campaign Committee last year. This brought together the expertise of a wide range of representatives in the private sector.

The results of this Committee's work and that of various organisations and bodies up and down the country, has resulted in a much higher profile for this subject and the level of awareness on the Year 2000 problem is now very high. However it is apparent that many companies particularly smaller companies have not yet stepped into action and done something about getting their systems compliant. We have launched a further information campaign, being run by Enterprise Ireland, aimed at this sector. Nevertheless there is a role for everyone in stirring key people into action. The Accountancy profession is uniquely placed in this regard as they are intimately involved and, more particularly, have a trusted and confidential role in advising their business clients. Their hands-on relationship with managers can be a unique asset in the effort towards ensuring compliance on Y2K. Advice from trusted and valued advisors can be worth a lot more than distant Government campaigns and I would encourage you all to bear this in mind in your client relationships.

It is of course in all our interests that the firms of the country grow and prosper and that they are fully aware of the danger that the Y2 K problem can represent for their future well being. A big effort on all our parts is required for success on this issue.

I wish to thank you all for your kind invitation here today and I want to sincerely wish your Organisation, every success for the future.