Last week the banking industry was in the spotlight, when Bank of Ireland paid £30.5 million to the Revenue Commissioners to settle its DIRT liabilities. This week it is the turn of the accountants, with the publication of recommendations on their role, drawn up by a group chaired by Senator Joe O'Toole. Both developments result directly from the Public Accounts Committee hearings on DIRT last year, which concluded that the banks had colluded with their customers in hiding money from the Revenue Commissioners and that in many cases their auditors had not noticed this - or had not bothered to highlight it.
The PAC hearings were not the first time that the role of external auditors - whose job it is to ensure that company accounts are properly completed - had been questioned. The McCracken Tribunal - and investigations undertaken on foot of it by officers appointed by the Tanaiste, Ms Harney - also pointed to serious shortcomings in particular cases.
The group chaired by Senator O'Toole is to be commended on producing a comprehensive report in a very short time period and at minimal cost. Under the proposals, the six accountancy bodies which operate in the Republic would continue to have a role in regulation. However they would be supervised by a new Statutory Oversight Board, which would have strong powers to intervene where necessary.
The group sets down detailed recommendations on how the new structure would operate. It has a number of key - and welcome - aspects. These include the publication of details of investigation and disciplinary procedures by the professional bodies, the right of the board to intervene in misconduct cases and much heavier fines for those breaking the rules. New regulations would also forbid an auditor from being too reliant on any one client and would introduce new safeguards in cases where accountancy firms provide a range of services to one client.
If the new structure is to work, then the way the new board operates will be crucial. It must not be a bureaucratic quango. Provided it is given the powers recommended, then it will have the ability to function effectively. However the skills and attitude of its members and the approach they take to their work would be crucial. The recommendation that just two of the eight members of the board should be representatives of the profession is a good start, as it is the interests of the consumers of accountancy services and the public at large which must be paramount.
Under the proposed structure, much will still depend on the willingness of professional bodies to regulate their own members. In the past incompetent or lax regulation - or perhaps the "old boy's network" - meant that the system failed too often. The accountancy bodies must in future take a more serious and diligent approach. Complaints from some accountancy bodies about the cost of the proposed new scheme are hard to take; can the industry really not sustain an extra cost of about £1 million a year to ensure a proper regulatory regime?
The Tanaiste has now invited all interested parties to participate in a debate on the proposals, before she introduces new legislation in the autumn. The accountants will complain about some of the proposals but at this stage it seems likely that the review group's recommendations will, indeed, form the basis of a new system of regulation.