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Failure to assess risks in the financial sector 'threatens our economy'
Thu 27 Jan 2011 09:22 pm filed by the Editor - Ireland
Minister for Trade and Commerce, Mr Billy Kelleher, TD, today [Wednesday] warned that failure to properly assess and interpret risks in the financial sector "threatens our whole economic system".
Minister Kelleher was speaking at the Chartered Accountants Ireland (CAI) Forum on the future of audit publication “Statutory Audit/ What the future holds?” The Minister said: ‘a reformed audit-related regime should be one that is capable of alerting shareholders, investors and regulators to the risks and problems arising across the business sector.
‘This is what the various reviews at national, EU and global levels must identify if confidence in the role of audits and auditors is to be successfully restored.’ Minister Kelleher identified worthwhile areas for consideration including how the communications between the boards of companies, their internal auditors and audit committees, statutory auditors and shareholders could be improved and made more meaningful.
‘Getting communications right is essential to the well being of companies and their stakeholders. This is crucial if we are to achieve an enhanced statutory audit process that fulfils the reasonable expectations of interested parties.’ Greater stakeholder activism in shaping the companies they own was also strongly advocated by the Minister.
‘I think it reasonable for the State to expect that, in return for the granting of limited liability status, companies should keep proper books of account and produce financial statements which give a true and fair view of the state of affairs of the company, and that a statutory auditor should express a “true and fair”opinion about them,’ Minister Kelleher said.
Concluding Minister Kelleher said: ‘One lesson coming loud and clear from our recent experiences is that the time has come for statutory auditors to adopt a more inquisitorial approach and to reassert their independence from the companies they audit and to restore confidence in the profession as a whole.’