The Public Accounts Committee has heard that auditors for the state-owned ACC bank made no provision for a tax bill of £17.5 million because it believed the Revenue Commissioners would not look for back tax. The tax arrears related to a review of the bank in 1992, which estimated that over half of the bank's non-resident accounts had insufficient or non existing documents to prove they were genuine. Senior officials from ACC said they believed the figure was never a realistic estimation and therefore no action was needed.

Former Chief Executive of ACC bank, John McCloskey, told the committee he made a distinction between the defective paper work and actual bogus accounts. This afternoon the bank's auditors, Ernst and Young, said the amount was estimated on a worst case scenario. They made no provision for it in the accounts because they never believed the Revenue would look for back tax. They said this impression was given during a meeting with the revenue commissioners in 1993. The Revenue Commissioners have rejected this claim and are currently assessing the bank's liability for DIRT tax.

Earlier today, ACC was reprimanded by committee chairman Jim Mitchell for failing to explain fully why staff members who had their own bogus non-resident accounts were never disciplined. Deputy Mitchell had asked the bank to investigate the matter overnight and report back to the committee today. But he said the lack of information in their response this morning, tended to discredit previous testimony given to the committee by bank officials.