Presentation to the 2004 ICAI Practice Conference Great Southern Hotel, Killarney 1 April, 2004 Ian Drennan Corporate Compliance Manager

Market Research Project Commissioned TNSmrbi to conduct research late last year. Purpose of the research was twofold, namely: –to assist the Office in measuring its effectiveness into the future by setting benchmarks, and –to assist in the formulation of the Office’s future customer service strategy.

Market Research Methodology The research comprised two discrete phases: –Qualitative: Representatives of a number of representative bodies were interviewed face to face. –Quantitative: Telephone interviews with samples of: company directors accountants/auditors, and liquidators.

Qualitative - Profile ODCE provided a list of primary and secondary targets for interview. However, the identities of those bodies and persons actually interviewed (seven in total) is confidential and was not disclosed to the ODCE. Interviewees represented the interests of: –auditors and accountants- company directors –company secretaries- shareholders –small & medium companies.

Results Summary - Qualitative Levels of compliance have increased significantly in the last number of years. Regulation has increased substantially over the last decade. While over-regulation was cited as being a significant issue, there was also a recognition of the fact that much of the legislation has been on the statute books for many years an is merely being enforced to a greater degree.

Results Summary - Qualitative Principal drivers for increased compliance were seen as being: –the establishment of the ODCE, and –the significant work done by the CRO in enforcing annual filing requirements. While professional bodies had a high level of awareness of the ODCE, directors of small and medium companies had lower levels of awareness.

Results Summary - Qualitative When asked about their perceptions of the role of the ODCE: –all seven respondents spontaneously answered enforcement. –five of the seven spontaneously answered education. There was also ‘…widespread recognition that the ODCE was presented with a very difficult situation to deal with…’

Results Summary - Qualitative There was negative comment to the effect that: –the Office is being too tough on smaller companies –there is too much emphasis on ‘technical issues’ –there is a perceived lack of collaboration with the profession.

Results Summary - Qualitative There was positive comment regarding: –ODCE guidance documents - ‘There is certainly a high recognition of the quality of educational output coming from the ODCE’. –ODCE’s presence making it easier for practitioners to impress upon client directors the importance of compliance. –the initial consultation process with the professional bodies. –the Office’s accessibility and willingness to educate.

Quantitative - Profile Telephone interviews were conducted with: –300 company directors –100 auditors/accountants –30 liquidators Identities of interviewees are confidential and are not known to the ODCE.

Quantitative - Profile Directors were spread evenly over companies with: –less than 10 employees –10 to 50 employees –In excess of 50 employees 88% of the directors interviewed have been directors for more than one year.

Quantitative - Profile 97% of the accountants interviewed were from firms with 20 or less accountants. Those interviewed were*: –ICAI50% –ACCA36% –ICPAI19% –Other 4% * Some are members of more than one body.

Results Summary - Quantitative Directors: 75% view compliance as being very important, with a further 22% believing it to be fairly important. 18% find compliance to be very easy, with a further 48% finding it fairly easy. Of those who perceive compliance to be easy, 24% indicated that it is so because their accountant handles it. Of those who perceive compliance to be difficult, 32% cited too many regulations as the main factor.

Results Summary - Quantitative 54% of directors familiar with the ODCE Highest levels of familiarity among directors of companies with in excess of 50 employees. When asked for their opinions as to the primary roles of the ODCE, those who were familiar with the Office answered: –encourage adherence to company law67% –improve compliance levels64% –to bring to account those in default63%

Results Summary - Quantitative When asked their opinions as to whether the ODCE has been effective in the following categories, those (excluding don’t knows) who answered ‘very effective’ or ‘fairly effective’ were: –ensuring that accountants have a greater knowledge of their obligations under company law: 83% –encouraging adherence to company law: 73% –deterring breaches or dishonest/irresponsible behaviour: 67% –ensuring that directors have a greater knowledge of their obligations under company law: 65% –bringing to account those who disregard the law: 42%

Results Summary - Quantitative Accountants/Auditors: 95% of respondents believe that compliance levels have increased in the past five years Of those above: –32% attribute this increase to increased regulation and enforcement –27% attribute it to new legislation, and –18% attribute it to the establishment of the ODCE.

Results Summary - Quantitative 97% of accountants familiar with the ODCE When asked for their opinions as to the primary roles of the ODCE, those who were familiar with the Office answered: –encourage adherence to company law98% –improve compliance levels98% –to bring to account those in default97%

Results Summary - Quantitative When asked their opinions as to whether the ODCE has been effective in the following categories, those (excluding don’t knows) who answered ‘very effective’ or ‘fairly effective’ were: –ensuring that accountants have a greater knowledge of their obligations under company law: 86% –encouraging adherence to company law: 91% –deterring breaches or dishonest/irresponsible behaviour: 73% –ensuring that directors have a greater knowledge of their obligations under company law: 54% –bringing to account those who disregard the law: 73%

Results Summary - Quantitative 49% of those interviewed have contacted the ODCE within the last year. Those who contacted the Office did so for the following reasons: –to make a statutory report65% –general enquiry29% –other 6%

Results Summary - Quantitative Those who have contacted the Office were asked to rate a number of factors on a scale of 1 to 10. The proportion of respondents who gave a score of 8 or higher was as follows (figures in parantheses are those who gave a score of 4 or more): –Staff knowledge of company law46% (82%) –Ease to get in touch with43% (86%) –Friendliness and helpfulness54% (93%) –Efficient return of calls etc.43% (86%) –Satisfactory resolution of matter41% (68%)

Conclusions While there are many positive aspects to the results, clearly there are some negative comments and perceptions. The results of the research will be reviewed in detail by the Office’s senior management in moving forward. Practitioners’ and bodies’ comments are welcome at any time

End of Presentation Thank You Questions?