The possible conflict involved in accountant Mr Noel Fox being a trustee of the Dunnes Stores trust while his firm acted as auditor to the Dunnes group, was examined by the Institute of Chartered Accountants in Ireland (ICAI) in 1996. No action was taken arising from the inquiry. Colm Keena reports.
On Monday, Mr Fox and Oliver Freaney & Co, the firm in which he was formerly a senior partner, were censured by the institute because the firm "did not do sufficient to ensure that Mr Fox was independent of the audit function of any of the Dunnes companies".
The censure was also because "Oliver Freaney & Co's objectivity in carrying out the audit of the companies in the Dunnes Stores group was not beyond question because it was not and could not have been seen to be independent".
The findings which led to the censure were made by the Blayney Committee which was established by the institute in the wake of the 1997 McCracken Report.
A spokesman for the institute said the 1996 inquiry had been taken into account by the Blayney Committee when it came to its findings. He would not comment further on the matter.
A spokeswoman for Oliver Freaney said the firm had issued its response to the Blayney findings on Monday and had nothing further to add.
The Dunnes group used two major accountancy firms to audit the accounts of its companies. Both firms had senior partners acting as members of the Dunnes trust.
The second accountancy firm involved, Deloitte & Touche, had two partners who sat on the Dunnes trust in the 1990s. They were Mr Bernard Uniacke and Mr Frank Bowen.
The membership of the trust in the 1990s was public knowledge and received extensive publicity at the time of a legal conflict within the Dunnes family in 1994.
On Monday the institute "reprimanded" Deloitte & Touche for not being seen to be independent from the Dunnes group.
An appeal committee that reviewed appeals from the Blayney Committee found that the accountancy firm "could not be seen to be independent in carrying out the audits in the Dunnes Stores group for a period of several years up to 1997 and accordingly its objectivity could not be assured".
The committee made the finding because the two Deloitte & Touche partners who were on the trust "attended virtually every board meeting of the holding company of the Dunnes Stores group for a period of several years up to 1997" and while the firm was acting as auditor.
A spokesman for Deloitte & Touche said it did not wish to comment on the matter.
The chief executive of the institute, Mr Brian Walsh, said on RTÉ radio yesterday that he "probably would have preferred" a different response to the ones issued by Deloitte & Touche and Oliver Freaney on Monday in response to the findings against them.
He had been asked if he would have preferred a more repentant and humble response to the responses they did issue. He said he probably would but that the firms' responses were a matter for themselves. Mr Walsh also said the censuring of the firms "could" have financial consequences for them in terms of winning business.