Compliance law may apply from January

New legislation requiring directors to take direct responsibility for companies' compliance with the law could come into force in January of next year.

Mr Kevin O'Donovan, director of the Audit Committee Institute, told a briefing held by the organisation yesterday that the Minister of State responsible, Mr Noel Ahern, had said that his preference was for the law to come into force on or after January 1st next.

The Companies (Auditing and Accounting) Act, 2003, will require directors to file compliance statements with their firms' annual accounts. These will detail the steps taken by the business to ensure compliance with company, tax and other legislation.

The Oireachtas has passed the Act. The Minister has to sign a commencement order to bring it into force.

Speaking at the briefing, Eircom director, Mr Padraic O'Connor, said that the new law was disproportionate to the tax and corporate law scandals that gave rise to it.

"There will be a continuous onus on directors to prove and declare that their companies are innocent," he said.

"But it is the law of the land, and companies need to galvanise the resources necessary to comply with the act and they should not underestimate the cost in terms of time and money."

Mr O'Donovan said that companies that had started preparing the statements were finding that it was a time-consuming process.

The Act covers companies registered in the State with annual turnovers of over €15.2 million and assets of over €7.6 million.