§ Mr. HanleyI beg to move amendment No. 304, in page 253, line 44, leave out from 'as' to end of line 45 and insert
'auditor under the Companies (Northern Ireland) Order 1986 or under the law of a country or territory outside the United Kingdom where it appears to the Secretary of State that the law and practice with respect to the audit of company accounts is similar to that in the United Kingdom.'.Ever since statutory requirements on auditors' qualifications were introduced into United Kingdom law in the 1940s, members of the Institute of Chartered Accountants in Ireland have been qualified for appointment as auditors in the United Kingdom regardless of whether their training was received in the Republic or in Northern Ireland. Correspondingly, persons qualified in the United Kingdom have always been able to audit the accounts of companies incorporated in the Republic. The 1153 justification for that is that company law in the Republic is similar to that in the United Kingdom. I taught company law in Ireland for many years and the similarities between the Companies Act 1948 and the Irish Companies Act 1963 were striking, except for one thing—the Irish Act was twice as long because it was printed in Irish on one side.A common body of accounting and auditing standards also applies throughout the British Isles. The amendment would allow the present situation to continue by enabling the Secretary of State to recognise, for the purpose of an auditor's qualification, training in the company audit work of any country in which the law and practice are similar to that in the United Kingdom. The amendment therefore goes slightly further than facilitating auditors in the Republic. After 1992, qualifications and practice may become increasingly similar in various countries.
§ Mr. John GarrettWill the hon. Member for Richmond and Barnes (Mr. Hanley) explain what is meant by
where … the law and practice with respect to the audit of company accounts is similar to that in the United Kingdom."?Is he also saying that accounting standards would to all intents and purposes he the same? Is the hon. Gentleman also making observations on the level of qualifications required so that they are comparable in both countries, so that auditors in Britain and in the Irish Republic would be qualified to the same standards and operating within the same codes of practice?
§ Mr. HanleyExactly that. The qualifications of Irish and United Kingdom chartered accountants are, I believe, exactly the same both in terms of the nature of their training and in terms of the audit work that they carry out once qualified and in order to become qualified.
Although the hon. Gentleman is extremely wise and knowledgeable and may well know this fact, it may interest the House to know that the Institute of Chartered Accountants in Ireland covers both Northern Ireland and Southern Ireland, so part of the United Kingdom already receives qualifications according to a law of Ireland. It therefore seems wholly sensible that the training leading to qualification should be recognised in statute as being exactly analogous. The provision would also facilitate United Kingdom accountants training in the Republic of Ireland.
The provision merely recognises the existing realities of training and qualification and I believe that it will be seen by the Irish Republic as a friendly gesture from our Government.
§ Mr. CousinsI should be grateful if the hon. Member for Richmond and Barnes (Mr. Hanley) and the Minister could clarify a few points. I well recollect our discussions on this matter in Committee when I believe that it was the hon. Member for Richmond and Barnes who informed us that the Prime Minister of Ireland, Charles Haughey, was an accountant and would be qualified under these provisions. Even the most devoted Unionist might have a slight feeling of trepidation about that eventuality. None the less, horse racing is popular in both the United Kingdom and the South of Ireland, so we may look forward to a happy coming together on that point. Is my thinking correct?
§ Mr. HanleyA chartered accountant, whether trained in the Republic of Ireland or the United Kingdom, divorces himself from his political feelings and preferences 1154 when practising as a chartered accountant, so whatever the hon. Gentleman's feelings about the President of the Republic of Ireland, I assure the hon. Gentleman that as a chartered accountant Mr. Haughey would be totally independent. In other words, the hon. Gentleman's thinking was indeed correct.
§ Mr. ForthAs my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) has just said, the Institute of Chartered Accountants in Ireland is specifically recognised in the present provisions on the qualifications of auditors in section 389 of the Companies Act 1985. All its members—whether trained in the Republic or in Northern Ireland—are therefore qualified in law to audit the accounts of British companies. That reflects the way in which company law and auditing practices in Britain and Ireland have developed hand in hand. Auditing standards and guidelines developed by the Auditing Practices Committee apply equally to the Republic of Ireland and to Great Britain. That answers the point raised by the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins).
There may be a case for considering whether the work involved in auditing companies in the Irish Republic is so similar to United Kingdom company audit work that practical training in such work could count towards the Bill's requirements on the content of practical training. In any case, I am happy to give my support to the amendment moved by my hon. Friend the Member for Richmond and Barnes, and I hope that the House will join me.
§ Amendment agreed to.