THE CHAIRMAN of the National Asset Management Agency (Nama), Frank Daly, has called for auditors to review their role in the aftermath of the banking crisis and scrutinise the long-term sustainability of businesses and the risks they take.

Speaking to the Corporate Governance Association of Ireland, Mr Daly said the auditing profession should reinterpret its role to be more forward-looking and to assess long-term strategies, ethical behaviour and underlying business risks.

“The profession is excessively focused on historic accounts which forces them to look backwards, not forwards,” he said.

Mr Daly warned there was an “expectations gap” between the the statutory role of an audit and the public expectation of the assurance that an audit should offer.

“The prudent strategic response for the profession would be to move in the direction of fulfilling the public expectation of its role,” he said.

Mr Daly joins a number of official voices who have criticised the role of auditors in the crisis.

Former IMF official Peter Nyberg described auditors as “silent observers” in his report on the crisis published in April 2011, saying they followed their accounting rules too narrowly.

Central Bank governor Patrick Honohan last year criticised “backward-looking” accounting for not making enough provisions to cover losses in the banks, saying that it raised investor doubts on other parts of the accounts.

Mr Daly said he agreed with the views of Mr Nyberg and others.

He defended the accountability applied to Nama, which was set up to buy the most toxic loans from the banks, triggering State capital injections and greater public ownership of the banking system.

He said Nama was regularly scrutinised by two Oireachtas committees and had its accounts audited by the Comptroller Auditor General, which has full access to its records and “a permanent presence” in its offices.

“Given the scale of Nama’s balance sheet and its importance to the revitalisation of the Irish economy, that level of Oireachtas and ministerial oversight is justifiable and appropriate,” he said.

Nama, which acquired loans with a face value of €72.3 billion from five banks for €30.5 billion, does not identify its debtors or disclose the full financial details on property and loan transactions.