Business Opinion: There is an interesting paragraph in the recently published annual report for 2002 from the Office of the Director of Corporate Enforcement, writes Colm Keena.

Referring to auditors' reports to his office, director Mr Paul Appleby says the character of the suspected offences which triggered these reports, is different to the character of the offences described in the reports which liquidators of insolvent firms file to him.

In other words, and to be blunt, auditors are not spotting evidence of misdemeanours and crimes their liquidator colleagues are spotting.

There may be reasons for this but an obvious one that would spring to the mind of a suspicious observer, is that auditors are being less than zealous in their examination of their client companies accounts. Since they are paid by their clients, this comes as no surprise.

Mr Appleby's observation comes in the context of the passage through the Oireachtas of the Companies Bill 2003, which will establish a new overarching body to review the regulation of auditors by their representative bodies, and which will also beef up the nature of the commitment which auditors will be obliged to make regarding their assessment of the accuracy of the accounts they sign off on. Auditors, of course, have a standard Pontius Pilate clause they use when signing off on a company's accounts. The effect of the clause is to state that the information presented to them has been audited, with directors taking responsibility for the accuracy of the information presented to the auditors and on which they based their assessment.

The Companies Bill 2003 will seek to increase the level of responsibilty that auditors must accept for the accuracy of a company's accounts. This has led to some expressions of unease on the part of the professionals, though this has been more muted of late.

The Bill further envisages a change whereby company directors would be obliged to sign annual statements each year to the effect that their firms have complied with company law during the period concerned.

This is an attempt to address the phenomenon so prevalent in the late 1990s, where directors of companies found to have been involved in "non-compliant" or illegal behaviour, said they had not been aware of the misdeeds until they were brought to their attention by an investigating authority.

There has been a great hue and cry about this and the negative effect it will have on business here. It seems strange, to put it mildly, that directors and auditors would both complain about being expected to know what was going on in the companies they are associated with. Who exactly they believe should know what is going on is not clear.

Seen from the perspective that limited liability is a substantial privilege given by society, the complaint that those who choose to take up this privilege should not be asked to shoulder responsibilty for compliance with the laws governing limited liability companies, seems cheeky.

The series of major scandals which hit Irish business during the mid and late 1990s did little for the reputation of directors, auditors or accountants.

It is obvious that compliance with the law was far from high on the agenda in Irish business. There were no whistle-blowers.

Our most famous accountant is our former Taoiseach, Mr Charles Haughey. His former apprentice and lifelong buddy the late Mr Des Traynor seems to have acted as a wizard of non-compliance, sweeping through the Irish business world organising this, that and the other dodgy scheme for significant business figures who were all too happy to go along with him.

The whole Ansbacher scheme - with which Mr Traynor will be forever associated - was a mutally beneficial arrangement concocted by Mr Traynor's bank, Guinness & Mahon, working with the Kennedy Crowley accountancy firm, as it was then called (it is now part of KPMG.)

Mr Noel Fox of Oliver Freaney and Co, auditors to the Dunnes Stores group, was Mr Traynor's point of contact when Mr Traynor sought to raise money for Mr Haughey from Mr Ben Dunne.

When the auditor to Dunnes found itself unable to sign off on the 1987 acounts of Dunnes Stores Ireland Company, because it couldn't understand some significant payments, Mr Fox referred them to Mr Dunne who referred them back to Mr Fox. This went on for years. The payments were payments to Mr Haughey.

One of the few instances in which an auditor may have played an admirable role was in the case of AIB, where the bank's internal auditor raised concerns about the level of non-resident accounts on the bank's books.

That said, the fact that Mr Tony Spollen felt pressed to raise the alarm raises the issue as to what other auditors of banks' books were doing, given the widespread nature of the whole bogus non-resident account issue over a period of decades. Also, it is pretty clear that senior executives in AIB had a particular, and not particularly favourable, view of Mr Spollen.

As a group, auditors in particular, were very well placed to know what was going on in corporate Ireland in the 1960 to late 1990s period, the period within which it is now generally accepted there was huge non-compliance with company and revenue law - that is widespread criminality.

Auditors are more watchdogs than bloodhounds but that said, it would seem from Mr Appleby's report that he still has concerns that they are not doing the job he, and the law, expects them to do.