Accountants KPMG and two former executives of the Northern Ireland-based engineering company, Powerscreen, will be the subjects of a new investigation into the company's affairs.
The Institute of Chartered Accountants in Ireland (ICAI) has announced it is to establish an independent committee of inquiry into the conduct of its members arising out of accounting irregularities at Powerscreen between November 1997 and June 1998.
KPMG were the auditors to Powerscreen and its Matbro subsidiary, where accounting irregularities were discovered. Two former Powerscreen executives - chief executive Mr Shay McKeown and finance director Mr Barry Cosgrove - are also members of the ICAI.
A number of investigations are currently being undertaken by the Serious Fraud Office (SFO) in the UK and by the London Stock Exchange into the events leading up to the placing of three million shares on the market in December 1997.
The company raised £18 million (€22.85 million) through the share placing shortly before it reported irregularities at Matbro to the London Stock Exchange.
The ICAI said yesterday that its inquiries will focus primarily on the audit and will determine whether any of its members should be subject to disciplinary proceedings for misconduct. ICAI chief executive Mr Brian Walsh said the institute had been in contact with the SFO and the London Stock Exchange since their inquiries got under way, but had only recently learned that these investigations did not extend to the audit.
"From initial correspondence, we got the impression they were looking at all of the issues, but last month they confirmed issues such as the audit were not included," Mr Walsh said. He added that the ICAI had subsequently decided to initiate its own inquiry into the conduct of its members associated with the audit.
"Any chartered accountant who is found guilty of misconduct is subject to disciplinary action under the institute's regulations," he said. The ICAI will not be commenting further on the conduct of individual members associated with this case until it has completed its investigation and disciplinary processes, it added.
The ICAI council will immediately begin to set the terms of reference of its inquiry and appoint members to the investigating committee. The inquiry will have the power to seek information or evidence from any person, firm, tribunal or Government agency. The ICAI has undertaken that it will publish its findings. Mr Walsh said the committee was likely to be headed by a lawyer and would also contain someone with audit experience within public companies.
Meanwhile, an inquiry by the ICAI into the possible misconduct of its members named in the McCracken tribunal proceedings has been suspended until the Moriarty tribunal concludes its work.
