The potential penalties against errant accountants proposed by the review group were not sufficient to satisfy Public Accounts Committee chairman, Mr Jim Mitchell.

"What we have here really is a pussycat rather than a tiger. Jail isn't mentioned. Holding people personally responsible is not mentioned," Mr Mitchell told the group's chairman, Sen Joe O'Toole.

"And this, in the aftermath of the tribunals, together with the fact that the Tanaiste had serious concerns of malpractice in the corporate governance area . . . at the end of the day, the real question is: does the report measure up to what has been revealed about corporate governance in this country? My feeling is that there is more to be done."

But Sen O'Toole told the committee that the question of penalties did not arise in the remit given to his group by the PAC. "I would remind the chairman that a young tiger is a pussycat until it bares its claws. What we are attempting to do is to find out how fraud and skulduggery can be discovered and it's from that point of view that law can take its course. It does not set out what happens to people who break the law. Feed this pussycat the right way and it can develop into the tiger you want it to be."

In between these two exchanges, which came at the end of a two-hour session, the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney, had told Mr Mitchell that of the 16 different inquiries she had initiated into malpractice in the corporate area, one had been published, three were at High Court level and she would be making an announcement on another shortly.

"I think there are a number of parts to this jigsaw. Everything is not contained here," she said, referring to the O'Toole report. "There are heavy penalties under the Companies Acts for breach of those Acts. This report will strengthen the law and put a huge onus on the auditing profession. I think it will bring about an enormous amount of change but unless we prosecute people for breaches of the law then all the law in the world is useless. We have seen a huge reluctance to prosecute," she added.

Sen O'Toole said the major issues that had been looked at were the independence of auditors, breaking links between companies and auditors through the establishment of audit committees and declarations of other work done for companies by auditors. An independent Oversight Board should be put in place which would monitor the self-regulation by bodies representing the profession of the auditors and their professional standards.

"I don't like the name Oversight," the Tanaiste said at one point. "I like the idea." But as to how it should be funded - the proposal was 60/40 by the profession and the State - she said she did not know if it was too severe on the Exchequer or too severe on the profession.

Mr Bernard Durkan TD questioned whether a £100,000 fine was a sufficient deterrent given the levels of finance which accountancy firms were responsible for. One of the provisions is for a fine, on indictment, of up to £100,000 on the professional body representing an auditor.

The Tanaiste said £100,000 in addition to costs was a very substantial fine. But being struck off was far more effective than any monetary fine. "That may need to be used more frequently, perhaps."

Sen O'Toole argued that anybody could put another nought at the end of the figure if that was what it took to be effective.

Ms Harney said that after the beef tribunal, it appalled her that no sanctions were taken against the accounting profession. Accountants did not always play a passive role: they designed some of the schemes that involved fraud.

Mr Pat Rabbitte TD asked if there was any reason why imprisonment should not be considered for offenders. Paraphrasing one attorney general, he asked: "Why shouldn't they also be deterred by the prospect of hanging their Armani suits on the peg in Mountjoy?"