ANALYSIS: In the US market most large companies have reported their second-quarter earnings figures. Results have generally exceeded expectations and this has given an important fillip to the US equity market, writes Colm Keena.

The accountancy profession has spent the week digesting the findings of the Blayney Committee and the subsequent appeals.

For many accountants, considering the admonishment meted out this week by the Institute of Chartered Accountants in Ireland (ICAI), the treatment of Dunnes Stores former chief accountant Mr Michael Irwin stood out.

Mr Irwin knowingly put invoices he knew to be false into the accounting system of Dunnes Stores (ILAC) Ltd. This was the stark finding of the Appeal Committee set up by the ICAI to hear appeals from the Blayney Committee, which it also set up.

The Appeal Committee said Mr Irwin put the invoices into the system "knowing that their passing into the system was likely to cause, or facilitate, the wrongful evasion of tax and the misstatement of financial accounts".

The invoices purported to be for work carried out by Faxhill Homes Ltd for Dunnes Stores in the ILAC centre, Dublin. In fact, the work had been carried out on the home of Mr Michael Lowry, and Mr Irwin knew this. Mr Irwin knew that the treatment of the invoices could facilitate Mr Lowry in evading tax.

Mr Irwin protested about the invoices to his boss, Mr Ben Dunne, but Mr Dunne insisted that the invoices be processed.

When the Blayney Committee reviewed Mr Irwin's case, it decided to censure him. He appealed and the Appeal Committee lessened the finding to one of reprimand. It said that it "was satisfied that Mr Irwin's culpability was mitigated by the circumstances in which the breach occurred and, in making its order, it had regard to his assistance to both committees".

"The Appeal Committee did not prefer any complaint in respect of Mr Irwin to the Disciplinary Committee."

The ICAI Disciplinary Committee can impose sanctions on a member, up to and including the removal of a person's licence to practice.

Why the Appeal Committee came to the decisions it did in relation to Mr Irwin is not known. Because it chose not to elaborate on the reasons for its decisions, the profession and the general public are left wondering.

Mr Irwin, who no longer works for Dunnes Stores, did not return requests for comment this week.

It was unfortunate for Mr Irwin that the details behind his case were outlined in the published findings.

The findings against Deloitte & Touche, Oliver Freaney & Co and Mr Noel Fox, a former senior partner in Oliver Freaney, were outlined in less stark terms.

The details behind many of the findings concerning Mr Fox are not known. For example, we do not know what is behind the finding that Mr Fox "concerned himself with audit queries to the management of Dunnes Stores".

Again, because the reasonings behind the decisions remain confidential, accountants and the public are left wondering what exactly it was the committees considered in these cases and how they came to their findings. Most of the findings had to do with dealings between accountants and accountancy firms on one hand, and Dunnes Stores on the other.

Six years after the establishment of the Blayney Committee, set up in the wake of the McCracken report, the findings were published, as new legislation makes its way through the Oireachtas concerning regulation of the accountancy profession.

Much of the discussion surrounding the legislation concerns whether the profession should be allowed to regulate itself. An obvious point about the Blayney process is that the two committees, although appointed by the ICAI, were chaired by people independent of the institute and the profession.

The Blayney Committee was chaired by retired Supreme Court member Mr Justice John Blayney. The Appeal Committee was chaired by Northern Ireland barrister Mr Hugh Kennedy QC. None of the accountancy professionals spoken to for this article expressed any doubt as to the independence of the committees. It seems that even the ICAI may not know the reasoning behind the committees' decisions.

Apart from the findings of the committees, a second issue members of the profession have been discussing is the response of the two censured firms. In particular, the response of Deloitte & Touche is causing comment.

The firm was "reprimanded" for not being seen to be independent of Dunnes, while carrying out Dunnes audits. It was censured for how it carried out the audit of Celtic Helicopters for the year to March 31st, 1992.

In its response, the firm said it welcomed "the successful outcome of its appeal of the Blayney Committee findings. The Appeal Committee has established that no issue of professional misconduct arose in relation to the firm."

It is not known what is being referred to as the Blayney findings against Deloitte & Touche have not been published.

The firm went on to say it noted the "technical nature of the findings which related to private companies".

"They are trying to manage the fallout in terms of their reputation but the response hasn't worked so well within the profession," said a source on Tuesday. "I believe an apology would have been better received. The reaction wasn't particularly helpful to the profession as it was seen as a bit arrogant."

ICAI chief executive Mr Brian Walsh admitted on RTÉ radio that he would have preferred a different response. Indeed, both sides made clear the tension that exists following the findings.

The tiff occurs in a context where the ICAI has a particularly close relationship with the top four accountancy firms, given the extent to which they work together on training. Deloitte said in its statement on Monday that it is "fully supportive of its institute and its regulatory role".

Mr Walsh has said that he has no doubt but that the outcome of the process is very serious for the firms affected.

"Lay people may not see the extent to which perception and reputation are crucial to a firm," said one.

Everyone agreed that the situation with the profession has moved on hugely since 1997. Two sources said the situation, as regards the accountancy profession, has to be seen in the context of business culture in general.

"The Companies Enforcement Act [which set up the Office of the Director of Corporate Enforcement\] came 40 years after the 1963 Companies Act. We are only now beginning to see the enforcement of the law where the primary responsibility lies - with directors. That is a point that is often missed. Directors should be getting more of the limelight than their agents - the accountants and auditors."

The adverse press coverage the accountancy profession has received in recent times, as a result of developments here and abroad, is a cause of concern, said one source. "The vast majority of accountants take their job very seriously and apply high standards. Most professionals I know do their utmost not to find themselves in the position some have now found themselves in."

A final point made was that the Department of Enterprise, Trade and Employment approved the rules governing the regulation of accountants in the 1990s and cannot be absolved of blame if it is decided that those rules were inadequate. In fact, as the ICAI is a 32-county body, the regime was also sanctioned by the authorities in the North.