The director of corporate enforcement has yet to receive notification from an auditor of a suspected breach of company law.

Mr Paul Appleby said he would be surprised if this situation did not change by the end of the year.

A new requirement on auditors to report suspected breaches to him has been in effect since November 28th, 2001.

Mr Appleby said he believed auditors were waiting for guidance from their representative body on their new obligations before making any final decision. He said all new audits since November 28th, 2001, and all audits which were ongoing on that date, were covered by the new law.

At a press conference to mark the publication of two consultation papers, Mr Appleby said he was anxious to get feedback on the new obligations on auditors.

The new measure applies where an auditor forms an opinion that a company - or an officer or agent of a company - has committed an indictable offence under the Companies Acts.

The obligation covers officers and agents of the company "whether or not the questionable behaviour" relates to the company being audited, Mr Appleby said.

An auditor "cannot close his or her eyes to what emerges from non-audit work" and this was true of activities involving an officer or agent which were not connected with the company being audited.

Mr Appleby said there was no obligation on a person doing non-audit work to report a suspected offence to his office, but that he would expect the audit partner of a firm doing both audit and non-audit work for a company to be aware of issues which might have an impact on his or her auditing duties.

He said there were "new safeguards coming down the tracks" which would work against the creation of conflicts of interest for firms which provided audit and non-audit services to a company.

Asked about the situation at Enron, Mr Appleby said he would expect auditors to be alert to activities such as off-balance sheet transactions. Overall, he said he agreed with the views of the Auditing Review group in relation to firms which provided both audit and non-audit services.

Auditors who failed to report suspected breaches of the Companies Act can leave themselves open to prosecution. The maximum sentence applicable is five years.

A second consultation paper published yesterday sets out the principal duties and powers of companies, directors, company secretaries and others under the Companies Acts. Mr Appleby said many people, particularly non-professionals, have an imperfect understanding of the duties imposed on companies and their directors.

Both consultation papers are available on the internet at www.odce.ie. Comment on both issues is invited up to March 22nd, 2002, after which Mr Appleby is to issue decision notices reflecting his opinion on the two areas.