Call for Government intervention in credit crisis

Government intervention may be needed to address the issue of banks’ reluctance to make funding available to businesses, the new Chairman of the Chartered Accountants Leinster Society said today.

Speaking at the Chartered Accountants Leinster Society's AGM, Paul Kennedy said that the continued reluctance of banks to release money to fund working capital requirements of viable businesses is now seriously threatening their long term survival and undermining the country's prospects of recovery.

Mr Kennedy said that accountants and financial management advisors are increasingly dealing with more demanding and challenging cases.

"People are using every means possible to keep their businesses alive. However, any attempts to plan for the future or manage working capital is predicated on generating cash flow or having facilities in place to adapt to changes in the market place or indeed replace or renew resources" he said. "If this is not forthcoming from the banks, we will need to see Government intervention to make it happen."

Mr Kennedy also said that he welcomes the debate that is taking place around the role of the audit and auditors and said that the profession is willing to discuss changes to the audit with various stakeholders.

"If there is a problem about audit scope, then auditors themselves or their standard setters cannot solve it alone. The users of financial statements all have a responsibility to make sure those statements serve businesses and the public alike," he said.