In choosing our theme for this year's conference we were determined to be upbeat. The temptation to reflect only on what has happened to the Irish economy in the last couple of years had to be resisted. Without doubt the Irish economy has been through its most turbulent shock in living memory. Arguably our integration into the global economy makes this recession more profound than the great depression of the 1920s and 30s.
As members you have been busy in both your companies and practising firms to help people survive this crisis. Indeed, many of you may find yourselves in trying situations. But hopefully, after two years of hardship we are beginning to turn the corner. Our own most recent business sentiment survey was more positive than at any stage in the last two years and some economists are predicting an earlier return to growth than previously anticipated.
A more positive economic environment may prove to be more beneficial to the important work of understanding what went wrong. Our response to this crisis has got to be a balanced once. Of course we have to look back to learn the mistakes of the past decade. But such inquiries should contribute to our ability to plan for the future.
For our own profession there are undoubtedly lessons to be learnt. When the crisis began there were issues around fair value accounting and its reported pro-cyclical tendencies. The Chartered Accountants Regulatory Board has an expensive inquiry process underway into issues relating to Anglo Irish Bank and the conduct of certain members.
Recently attention has focussed on the audit profession. We should have no difficulty with that. Audit, if it is to remain relevant to its stakeholders, should be the subject of ongoing debate and review. It is disturbing perhaps that the audit expectation gap is still with us and as strong as ever. Yet as a profession we cannot afford to be complacent about that. If the audit does not meet the expectations of those to whom it is directed then it is a problem for us all.
It has certainly been the case in other jurisdictions that the role of audit has been part and parcel of reviews into the financial crisis and it is the view of this Institute that the profession here should welcome debate and discussion in this country. It is obviously for the Oireachtas to determine the nature of any inquiry but as the leading representative body for auditors we would be happy to take part in the banking inquiry process already initiated by the Government. Such a debate though must be as forward looking as it is reflective. It must also have regard to what is going on internationally. I refer particularly to the recent announcement from Commissioner Barnier and the proposed green paper on auditing.
Audit remains a valuable process but much of process that generated added value takes place behind closed doors. Much of the work of the ODCE takes place on foot of auditors reports provided and similar reporting to other regulators and others also takes place confidentially.
If audit scope is to change, then the statutory framework under which audits are conducted must also change. Any changes proposed in this country should be consistent with the developing international audit environment. The existing liability regime will undoubtedly be an impediment to the provision of additional assurance by auditors and it too must be on the table in any new arrangements that might be proposed.
Chartered Accountants Ireland has always been a public interest body and as such we will be happy to engage in any debate aimed at improving the environment in which our economy, North and South, can return to prosperity.