Moves to tighten the corporate governance regime threaten confusion rather than clarity and may dissuade overseas investors, accountants' lobby groups cautioned yesterday.

Stricter reporting obligations set out in the recent Companies (Auditing and Accounting) Bill are unworkable and could make the Republic an unattractive place to do business, the Institute of Certified Public Accountants warned.

The enforcement watchdog envisaged by the bill - the Irish Auditing and Accountancy Supervisory Authority (IAASA) - is fundamentally flawed, with accountants inadequately represented on its governing board, the institute said.

"With only two of the 13 directors of the board professional accountants, it is difficult to see how the board will be able to carry out. . . key functions," said Mr Alan Farrelly, the institute's president.

"I fail to see how the board or a committee of its members will have the expertise to deal with reviewing whether the accounts of companies comply with the companies acts."

The suggestion that company directors be required to prepare statements of inclusion in annual reports confirming compliance with "relevant obligations" is too onerous and contradicts the review group on auditing, according to the Institute of Chartered Accountants in Ireland.

But one of the architects of the reform package said vocal opposition from accountants was destined to backfire.

Senator Joe O'Toole, a member of IAASA's provisional governing body, said the profession should work with the Government rather than seek to frustrate it.

"Accountancy bodies should be under no illusion that if they try to row back on the proposal in the legislation and re-open the whole debate then make no mistake but things can only get more demanding.

"These reforms are firmly rooted in the public and political response which followed the report of the Public Accounts Committee and subsequent developments such as off-shore accounts, fraud and various tribunals," he said.

"We need to change the culture of the country to one of compliance within the tax regime. Our shared objective must be that there would be trust and confidence in the view of the auditor and that the auditor is accepted and trusted as the guardian of probity. I firmly believe that this legislation will protect the profession from damage by non-compliant members."

Mr O'Toole was addressing the Institute of Certified Public Accountants' spring lunch in Dublin.