Auditors blow whistle on 30 suspect firms

AUDITORS have already blown the whistle on 30 companies suspected of breaking the law in their accounting practices.

Recent financial scandals in the United States, such as the Enron affair involving Arthur Andersen, have resulted in a freefall in the stock market and a decline in public confidence in the business community and the auditing profession. Since the introduction of new laws in this country at the end of last year requiring auditors to report the discovery of suspected indictable offences, the white collar crime enforcer has received 30 reports for investigation.

Director of Corporate Enforcement Paul Appleby said he felt reporting financial malpractice was not only in the public interest, but also in the interests of the auditing profession.

“Perhaps recent developments, such as the demise of Arthur Andersen, have sent a message to auditors in general that they should align themselves very closely with the public interest and public disclosure,” he said.

Launching a set of guidelines for auditors and accountants on their obligations to report suspected law-breaking, Mr Appleby said that aside from his enforcement role, his other key objective was to encourage and facilitate compliance with company law.

The guidelines include details of the 128 indictable offences under the Companies Act and sets out the legal protection covering auditors who make a report to the Office of the Director of Corporate Enforcement.

The reporting requirement in the legislation, which came into effect on November 28, 2001, is unique to the Republic.

Meanwhile, Mr Appleby said that his office’s follow-up investigations into breaches of Company Law in the operation of the Ansbacher accounts was making progress.

He said the ODCE was seeking permission in the High Court for certain documents from the Anbacher investigators files which would assist their inquiries.

The Director of Corporate Enforcement said he was satisfied with the numbers of staff available to him to pursue the Ansbacher cases.

He said that he would keep staffing levels under review and that if additional resources were required, he was confident they would be provided.

“I am certainly happy that we would find a sympathetic ear,” Mr Appleby added.