An appeal committee set up in relation to alleged misconduct by accountants named in the McCracken tribunal report has upheld a number of the findings made against them.
The Institute of Chartered Accountants in Ireland (ICAI) now plans to recover the estimated €3.2 million cost of its investigations from accountants including Deloitte & Touche, Oliver Freaney & Company, Noel Fox and Michael Irwin.
The appeal committee was established in 2000 after the accountants appealed findings made against them by the Blayney Committee, itself set up after they were named in the 1997 report of the McCracken tribunal.
Today, the committee said it had found that auditors Deloitte & Touche could not be found to be independent in carrying out the audit of companies in the Dunnes Stores group for a period of several years up to 1997 and that, accordingly, its objectivity could not be assured.
It has also found that in carrying out the audit of Celtic Helicopters Ltd for the year ended 1992, Deloitte & Touche did not observe the appropriate auditing standard and guidelines.
The committee confirmed formal orders censuring Deloitte & Touche, against which D&T had appealed.
The ICIA appeal committee has also found that the accounting firm Oliver Freaney and Company departed from auditing guidelines and failed to fulfil its professional obligations in carrying out the audit of Dunnes Stores (ILAC) Ltd for the year ended 1st January 1994.
It said Oliver Freaney's objectivity was not beyond question because it was not and could not be seen to be independent, the committee found. It also states that Oliver Freaney and Company did not do sufficient to ensure its accountant Mr Noel Fox was independent of the audit function of any of the Dunnes Stores companies.
The committee also upheld a finding that Mr Michael Irwin "breached the standards of integrity expected of a member of the institute" and made an order reprimanding him. However, the committee allowed an appeal in respect of Mr Paul Carty, a former senior partner with Deloitte & Touche.
Set up in September 1997, the Blayney committee investigated possible professional misconduct by the accountants, including Mr Noel Fox and the firm he worked for, Oliver Freaney & Co. Freaney & Co acted as auditor to the former Fine Gael minister Michael Lowry's company Streamline Enterprises and as a financial consultant to Dunnes Stores.
It also investigated Deloitte & Touche, which was joint auditor with Oliver Freaney to Dunnes Stores.
The Blayney inquiry completed its work in May 2000. The Blayney Appeal Committee, which published its findings today, was set up in June 2000 after some of the findings of the previous inquiry were appealed.
Labour spokesman on Enterprise, Trade and Employment, Mr Brendan Howlin, said public confidence in the accountancy professional was essential to the integrity of our business and commercial life.
"The conduct identified in the McCracken Report and now upheld by the Blayney process has damaged that andboth the State and the professional organisations now need to take the appropriate remedial action," he said.
Mr Howlin said the Companies (Auditing and Accounting) Bill, 2003, is currently before the Oireachtas and that very careful consideration would now have to be given to this legislation to ensure that adequate powers of supervision are put in place oversee the accountancy profession.