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S.I. No. 312/2016 - European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No 537/2014) Regu

S.I. No. 312/2016 - European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No 537/2014) Regulations 2016. Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory Instruments Pre-1922 Legislation Constitution External Resources Bills (Houses of the Oireachtas) Iris Oifigiúil / Official Gazette Revised Acts (LRC) Classified List of Legislation (LRC) Translations (acts.

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  3. s)or rangeBliain nó blianta nó raon TypeCineál All Legislation Acts Statutory Instruments Advanced SearchCuardach Casta HomeBaile Statutory InstrumentsIonstraimí Reachtúla 2016 S.I. No. 312/2016 - European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No 537/2014) Regulations 2016. S.I. No. 312/2016 - European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No 537/2014) Regulations 2016. AmendmentsLeasuithe Download PDF Íoslódáil PDF ARRANGEMENT OF REGULATIONS PART 1 PRELIMINARY MATTERS 1. Citation, commencement and construction 2. Revocation and savings 3. Application 4. Interpretation — general PART 2 AMENDMENT OF COMPANIES ACT 2014 5. Definition 6. Amendment of section 2 of Principal Act 7. Amendment of section 35 of Principal Act 8. Amendment of section 322 of Principal Act 9. Amendment of section 336 of Principal Act 10. Amendment of section 337 of Principal Act 11. Amendment of section 380 of Principal Act 12. Amendment of section 390 of Principal Act 13. Amendment of section 394 of Principal Act 14. Amendment of section 900 of Principal Act 15. Amendment of section 904 of Principal Act 16. Amendment of section 905 of Principal Act 17. Amendment of section 906 of Principal Act 18. Amendment of section 907 of Principal Act 19. Amendment of section 918 of Principal Act 20. Amendment of section 919 of Principal Act 21. Amendment of section 930 of Principal Act 22. Amendment of section 932 of Principal Act 23. Supplemental provisions in relation to section 934 (including as concerns its relationship to provisions of 2016 Audits Regulations) 24. Amendment of Principal Act 25. Amendment of section 938 of Principal Act 26. Amendment of section 941 of Principal Act 27. Application to court to confirm decision to impose relevant sanction 28. Amendment of section 1097 of Principal Act 29. Amendment of section 1305 of Principal Act 30. Amendment of section 1441 of Principal Act 31. Amendment of section 1448 of Principal Act PART 3 DESIGNATION OF COMPETENT AUTHORITY AND ASSIGNMENT OF FUNCTIONS 32. Designation of competent authority 33. Assignment of functions 34. Annual audit programme and activity report 35. Operation of certain provisions with regard to particular recognised accountancy bodies 36. Conflicts of interest to be avoided PART 4 APPROVAL OF STATUTORY AUDITORS AND AUDIT FIRMS, PROHIBITION ON UNAPPROVED PERSONS ACTING AS AUDITOR, ETC. Chapter 1 Approval of Statutory Auditors and Audit Firms 37. Applications for approval, general principle as to good repute, etc. 38. Basis on which audit firms approved in other Member States may carry out statutory audits in State 39. Restriction as to persons who may carry out statutory audits 40. Restriction on acting as statutory auditor 41. Restriction on acting as statutory audit firm 42. Offence for contravening Regulation 39, 40 or 41 43. Conditions for approval as statutory auditor 44. Transitional provisions 45. Appropriate qualification for purpose of Regulation 43(
  4. a)46. Conditions for approval as statutory audit firm 47. Powers of Director of Corporate Enforcement 48. Evidence in prosecutions under Regulation 47 Chapter 2 Aptitude Test 49. Aptitude test to be passed 50. Scope of aptitude test 51. Adequate standards to be applied in administration of aptitude test Chapter 3 Withdrawal of Approval 52. Grounds for mandatory withdrawal of approval in case of statutory auditor 53. Grounds for mandatory withdrawal in case of statutory audit firm 54. Appeals against withdrawal of approval 55. Certain persons to be notified of withdrawal of approval 56. Other persons to be notified of withdrawal of approval PART 5 STANDARDS AND PROVISIONS APPLICABLE TO STATUTORY AUDITORS AND AUDIT FIRMS Chapter 1 Appointment of Statutory Auditors or Audit Firms 57. Prohibition of contractual clauses restricting choice of auditors 58. Selection procedures for statutory auditors or audit firms by public-interest entities 59. Appointment of statutory auditors or audit firms by public-interest entities — informing the Supervisory Authority 60. Removal of statutory auditors or audit firms by public-interest entities — supplementary provisions 61. Directors’ report to include date of last appointment of statutory auditor or audit firm Chapter 2 Standards for Statutory Auditors 62. Continuing education 63. Professional ethics 64. Independence, objectivity and professional scepticism 65. Standards for purposes of Regulations 62 to 64 66. Arrangements for enforcement of standards Chapter 3 Confidentiality and Professional Secrecy 67. Rules of confidentiality to apply 68. Supplemental provisions in relation to Regulation 67 69. Saving 70. Rules of confidentiality in relation to entities in third countries 71. Incoming statutory auditor or audit firm to be afforded access to information 72. Access by recognised accountancy body to audit documents 73. Access by Supervisory Authority to information and documents held by recognised accountancy bodies or relevant persons 74. Professional privilege 75. No liability for acts done in compliance with Regulations 76. Restriction of section 940 of Companies Act 2014 Chapter 4 Auditing Standards and Audit Reporting 77. Auditing standards to be applied 78. Audit of group accounts — responsibility of group auditor 79. Further responsibility of group auditor 80. Additional report to audit committee 81. Auditors’ reporting obligations under Article 12 of Regulation (EU) No 537/2014 Chapter 5 Record keeping 82. Record keeping Chapter 6 Objectivity 83. Future viability PART 6 PUBLIC REGISTER 84. Public register 85. Notification of information to Registrar of Companies 86. Prohibition on certain acts unless registered 87. Obligation of statutory auditor or audit firm to notify certain information 88. Information must be signed 89. Removal of third-country auditor or audit entity registered in accordance with Regulation 135 from public register 90. Language of information to be entered in public register PART 7 INDEPENDENCE 91. Requirement for independence — general 92. Professional scepticism 93. Prohibited relationships — specific provisions to secure independence 94. Prohibited relationships — financial or beneficial interest 95. Prohibited relationships — mergers and acquisitions 96. Threats to independence and other information to be recorded 97. Preparation for statutory audit and assessment of threats to independence 98. Internal organisation of statutory auditors and audit firms 99. Organisation of work of statutory auditors and audit firms 100. Organisation of work of statutory auditors and audit firms — audit files 101. Restrictions with regard to fees 102. Rotation of key audit partner in cases of public-interest entities 103. Moratorium on taking up certain positions in audited entities 104. Rotation of statutory auditor and audit firms in the case of public-interest entities — extension 105. Rotation — reports by statutory auditor and audit firm in case of public-interest entities 106. Provision of certain prohibited non-audit services by auditors of public-interest entities PART 8 QUALITY ASSURANCE OF STATUTORY AUDITORS AND AUDIT FIRMS Chapter 1 Quality assurance 107. Quality assurance by Supervisory Authority of statutory audit of public-interest entities and third-country auditors, etc. 108. System of quality assurance to be put in place 109. Organisation of quality assurance system 110. Quality assurance review deemed to include individual auditors in certain cases 111. Right of recognised accountancy body as regards professional discipline Chapter 2 Investigations and Sanctions 112. System of investigation and penalties 113. Duty of each recognised accountancy body with regard to sanctions 114. Scope of penalties and publicity in relation to their imposition PART 9 AUDIT COMMITEES 115. Audit committees for public-interest entities PART 10 REGULATORY ARRANGEMENTS BETWEEN MEMBER STATES Chapter 1 Cooperation with other Member States 116. Specific requirements with regard to cooperation 117. Confidentiality of information 118. Supplemental provisions in relation to Regulation 117 119. Obligation to supply information required for certain purposes and saving concerning confidential information 120. Obligation of Supervisory Authority or recognised accountancy body to gather information 121. Application of Regulation 117 to certain information 122. Requesting authority to be notified if its request not complied with 123. Grounds for refusing request for information 124. Use to which information may be put 125. Counterpart authority to be notified of non-compliance with Audit Directive and Regulation (EU) No 537/2014 126. Counterpart authority may be requested to carry out investigation 127. Duty of Supervisory Authority or recognised accountancy body to take certain action 128. Due consideration to be given to counterparty’s request for investigation 129. Grounds for refusing request for investigation Chapter 2 Mutual Recognition of Regulatory Arrangements between Member States 130. Mutual recognition of regulatory arrangements between Member States Chapter 3 Transfer of Working Papers to Third-country Competent Authorities 131. Transfer of audit documentation to third-country competent authority 132. Derogation from Regulation 132 in exceptional cases 133. Particulars of working arrangements to be notified PART 11 THIRD-COUNTRY AUDITORS Chapter 1 International Aspects 134. Approval of third-country auditor Chapter 2 Registration and Oversight of Third-country Auditors and Audit Entities 135. Registration of third-country auditors and audit entities 136. Exemption from quality assurance 137. Audit by non-registered auditor or audit entity — consequence 138. Conditions for registration of third-country auditor or audit entity 139. Supervisory Authority may assess matter of equivalence for purposes of Regulation 138

(2)(c)
  1. Certain fees chargeable by Supervisory Authority
  2. Exemptions in case of equivalence PART 12 MISCELLANEOUS
  3. Summary proceedings
  4. Savings for disciplinary proceedings in being
  5. Amendment of Irish Collective Asset-management Vehicles Act 2015 SCHEDULE 1 Standards relating to training and qualifications for approval of individual as statutory auditor SCHEDULE 2 Information required, by Part 6, to be Supplied and Entered in Public Register S.I. No. 312 of 2016 EUROPEAN UNION (STATUTORY AUDITS) (DIRECTIVE 2006/43/EC, AS AMENDED BY DIRECTIVE 2014/56/EU, AND REGULATION (EU) NO 537/2014) REGULATIONS 2016 Notice of the making of this Statutory Instrument was published in “Iris Oifigiúil” of 17th June,
  6. I, MARY MITCHELL O’CONNOR, Minister for Jobs, Enterprise and Innovation, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972), and for the purpose of giving effect to Directive 2006/43/EC of the European Parliament and of the Council of 17 May 20061 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC, as amended by Directive 2014/56/EU of the European Parliament and of the Council of 16 April 20142 amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts, and giving effect to certain provisions of Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 20143 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC, hereby make the following regulations: PART 1 PRELIMINARY MATTERS Citation, commencement and construction 1.
(1)These Regulations may be cited as the European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No 537/2014) Regulations 2016.
(2)These Regulations shall come into operation on 17 June 2016.
(3)These Regulations shall be read as one with the Companies Act 2014 (No. 38 of 2014). Revocation and savings 2.
(1)Subject to paragraph
(2), the European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 ( S.I. No. 220 of 2010 ) are revoked.
(2)Subject to Regulation 143
(3), the 2010 Audits Regulations, as in force immediately before 17 June 2016— (
  1. a)in so far as they related to the conduct of statutory audits and the duties and powers of statutory auditors and audit firms in relation thereto for financial years commencing before that date, shall continue to apply to the conduct of statutory audits and the duties and powers of statutory auditors and audit firms in relation thereto for those financial years, and (
  2. b)as regards each other matter provision for which was made by those Regulations before that date, shall continue to make such provision before that date. Application 3. Save where otherwise provided (including provided by Regulation (EU) No 537/2014), these Regulations apply— (
  3. a)in so far as they relate to the conduct of statutory audits and the duties and powers of statutory auditors and audit firms in relation thereto, to the conduct of statutory audits for financial years commencing on or after 17 June 2016, and (
  4. b)as regards each other matter provision for which is made by these Regulations, on and from 17 June 2016. Interpretation — general 4.
(1)In these Regulations— “2010 Audits Regulations” means the European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 revoked by Regulation 2
(1); “AAPA report” means the annual audit programme and activity report referred to in Regulation 34
(1); “additional report to the audit committee” means the report submitted to the audit committee of a public-interest entity by the statutory auditor or audit firm carrying out statutory audits as set out in Article 11 of Regulation (EU) No 537/2014; “affiliate”, in relation to a statutory audit firm, means any undertaking, regard-less of legal form, which is connected to the statutory audit firm by means of common ownership, control or management; “approved”, in relation to a statutory auditor or audit firm, means approved under these Regulations; “aptitude test” means an aptitude test referred to in Regulation 49
(1); “audit committee”, in relation to a public-interest entity, means the audit committee established for the entity under Regulation 115; “Audit Directive” means Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 as amended by Directive 2014/56/EU of the European Parliament and of the Council of 16 April 2014 on statutory audits of annual accounts and consolidated accounts; “audit working papers”, in relation to a statutory auditor or audit firm, means material (whether in the form of data stored on paper, film, electronic media or other media or otherwise) prepared by or for, or obtained by the statutory auditor or audit firm in connection with, the performance of the audit concerned, and includes— (
  1. a)the record of audit procedures performed, (
  2. b)relevant audit evidence obtained, and (
  3. c)conclusions reached, and a reference to audit working papers in relation to a Member State auditor or audit firm, or a third-country auditor or audit entity, shall be read accordingly; “auditing standards” means the standards adopted by the Supervisory Authority under Regulation 77 in accordance with which statutory audits shall be carried out; “Commission” means Commission of the European Union; “counterpart authority” shall be construed in accordance with Regulation 116; “disciplinary committee” has the same meaning as in section 900 of the Companies Act 2014 ; “EEA Agreement” has the same meaning as in section 2 of the Companies Act 2014 ; “EEA state” has the same meaning as in section 2 of the Companies Act 2014 ; “enactment” has the same meaning as in section 2 of the Companies Act 2014 ; “financial year”— (
  4. a)in relation to the Supervisory Authority and an audited entity, shall be construed in accordance with section 288 of the Companies Act 2014 , and (
  5. b)in relation to a statutory auditor or audit firm, means— (
  6. i)subject to subparagraph (ii), any period in respect of which a profit and loss account or income statement is prepared by the auditor or audit firm for income tax or other business purposes, or (
  7. ii)in the case of a statutory audit firm that is a company, any period in respect of which accounts under the Companies Act 2014 are prepared by the firm, whether that period is of a year’s duration or not; “firm” includes a body corporate; “group auditor” means the statutory auditor or audit firm carrying out the statu-tory audit of the group accounts concerned; “home Member State” means the Member State in which a statutory auditor or audit firm is approved in accordance with Article 3
(1)of the Audit Directive; “host Member State” means— (
  1. a)a Member State in which a statutory auditor approved by his or her home Member State seeks to be also approved in accordance with Article 14 of the Audit Directive, or (
  2. b)a Member State in which an audit firm approved by its home Member State seeks to be registered, or is registered, in accordance with Article 3a of the Audit Directive; “key audit partner” means— (
  3. a)the one or more statutory auditors designated by a statutory audit firm for a particular audit engagement as being primarily responsible for carrying out the statutory audit on behalf of the audit firm, (
  4. b)in the case of a group audit, at least the one or more statutory auditors designated by a statutory audit firm as being primarily responsible for carrying out the statutory audit at the level of the group and the one or more statutory auditors designated as being primarily responsible at the level of material subsidiaries, or (
  5. c)the one or more statutory auditors who sign the audit report; “medium-sized undertakings” means the undertakings referred to in Article 3
(3)of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 20134 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC; “Member State” means a Member State of the European Union or an EEA state; “Member State audit firm” means an audit entity approved in accordance with the Audit Directive by the counterpart authority of another Member State to carry out audits of annual or group accounts as required by European Union law; “Member State auditor” means an auditor approved in accordance with the Audit Directive by a counterpart authority of another Member State to carry out audits of annual or group accounts as required by European Union law; “Minister” means the Minister for Jobs, Enterprise and Innovation; “network”, in relation to a statutory auditor or audit firm, means the larger structure: (a) which is aimed at cooperation and to which the statutory auditor or audit firm belongs; (b) either— (i) the clear objective of which is profit or cost-sharing, or (ii) which shares— (I) common ownership, control or management, (II) common quality control policies and procedures, (III) a common business strategy, or (IV) the use of a common brand-name or a significant part of pro-fessional resources; “public-interest entities” means— (a) entities governed by the law of a Member State whose transferable securities are admitted to trading on a regulated market of any Member State within the meaning of point 14 of Article 4
(1)of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 20045 on markets in financial instruments amending Council Directives 85/611/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EC, (b) credit institutions as defined in point 1 of Article 3
(1)of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 20136 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (but excluding credit institutions referred to in Article 2 of Directive 2013/36/EU), and (c) insurance undertakings within the meaning of Article 2
(1)of Directive 91/674/EEC of 19 December 19917 on the annual accounts and consolidated accounts of insurance undertakings; “public register” shall be construed in accordance with Regulation 84; “recognised accountancy body” has the same meaning as in section 900 of the Companies Act 2014 ; “Regulation (EU) No 537/2014” means Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC; “small undertakings” means the undertakings referred to in Article 3
(2)of Directive 2013/34/EU; “standards” means those standards, as defined in section 900 of the Companies Act 2014 , of a prescribed accountancy body which is a recognised accountancy body; “statutory audit” means an audit of individual accounts or group accounts in so far as— (
  1. a)required by European Union law, or (
  2. b)required by national law as regards small undertakings; “statutory audit firm” means— (
  3. a)an audit firm which is approved in accordance with these Regulations to carry out statutory audits, or (
  4. b)an audit firm which is registered in accordance with Regulation 38 to carry out statutory audits; “statutory auditor” means an individual who is approved in accordance with these Regulations to carry out statutory audits; “statutory auditors’ report” means the report made under section 391 of the Companies Act 2014 in the form required by section 336 of that Act; “Supervisory Authority” has the same meaning as in section 900 of the Companies Act 2014 ; “third country” means a country or territory that is not a Member State or part of a Member State; “third-country audit entity” means an entity, regardless of its legal form, which carries out audits of the annual or consolidated financial statements of a company incorporated in a third country, other than an entity which is registered as an audit firm in any Member State as a consequence of approval in accordance with Article 3 of the Audit Directive; “third-country auditor” means an individual who carries out audits of the annual or consolidated financial statements of a company incorporated in a third country, other than an individual who is registered as a statutory auditor in any Member State as a consequence of approval in accordance with Articles 3 and 44 of the Audit Directive; “third-country competent authority” means an authority in a third country with responsibilities, as respects auditors and audit entities in that country, equivalent to those of the Supervisory Authority.
(2)A reference in these Regulations to a registered third-country auditor or audit entity is a reference to a third-country auditor or audit entity registered under Chapter 2 of Part 11.
(3)A word or expression that is used in these Regulations and is also used in the Audit Directive shall have in these Regulations the same meaning as it has in the Audit Directive.
(4)The definition of “court” in section 2
(1)of the Companies Act 2014 shall, with any necessary modifications, apply to references in these Regulations to a court as that definition applies to references to a court in that Act. PART 2 AMENDMENT OF COMPANIES ACT 2014 Definition
  1. In this Part, “Principal Act” means the Companies Act 2014 . Amendment of section 2 of Principal Act
  2. Section 2 of the Principal Act is amended, in subsection
(1)— (
  1. a)in the definition of “statutory auditor”, by the substitution of “2016 Audits Regulations, and includes a firm registered in accordance with Regulation 38 of those Regulations” for “European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 ( S.I. No. 220 of 2010 )”, and (
  2. b)by the insertion of the following definition: “‘2016 Audits Regulations’ means the European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No 537/2014) Regulations 2016 (S.I. No. [-] of 2016);”. Amendment of section 35 of Principal Act 7. Section 35 of the Principal Act is amended by the substitution of the following subsection for subsection
(7): “
(7)An electronic filing agent shall not, by virtue of his or her authorisation under this section to act as such, be regarded as an officer or servant of the company concerned for the purposes of Regulation 93
(2)or
(3)of the 2016 Audits Regulations.”. Amendment of section 322 of Principal Act 8. Section 322 of the Principal Act is amended, in subsection
(4), by the substitution of “2016 Audits Regulations” for “European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 ( S.I. No. 220 of 2010 )”. Amendment of section 336 of Principal Act 9. Section 336 of the Principal Act is amended— (a) by the substitution of the following subsection for subsection
(2): “
(2)The statutory auditors’ report shall be in writing and shall— (
  1. a)include an introduction identifying the entity financial statements, and where appropriate, the group financial statements, that are the subject of the audit and the financial reporting framework that has been applied in their preparation, (
  2. b)include a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted, and (
  3. c)identify the place of establishment of the statutory auditors who made the report.”, (
  4. b)by the substitution of the following subsection for subsection
(5): “
(5)The statutory auditors’ report shall— (
  1. a)state whether, in their opinion, based on the work undertaken in the course of the audit— (
  2. i)the information given in the directors’ report for the financial year for which statutory financial statements are prepared is consistent with the company’s statutory financial statements in respect of the financial year concerned, and (
  3. ii)the directors’ report has been prepared in accordance with applicable legal requirements, and (
  4. b)state whether, based on their knowledge and understanding of the company and its environment obtained in the course of the audit, they have identified material misstatements in the directors’ report and, where they have so identified such misstatements, give an indication of the nature of each of such misstatements.”, (
  5. c)by the insertion of the following subsection after subsection
(5): “(5A) The statutory auditors’ report shall provide a statement on any material uncertainty relating to events or conditions that may cast significant doubt about the entity’s ability to continue as a going concern.”, and (d) by the insertion of the following subsection after subsection
(9): “(9A)(
  1. a)Subject to paragraph (b), where the statutory audit was carried out by more than one statutory auditor, the statutory auditors shall agree on the results of the statutory audit and submit a joint report and opinion. (
  2. b)In the case of disagreement, each statutory auditor shall submit his, her or its opinion in a separate paragraph of the audit report and shall state his, her or its reason for such disagreement.”. Amendment of section 337 of Principal Act 10. Section 337 of the Principal Act is amended by the substitution of the following subsection for subsection
(2): “
(2)Where the auditor is— (
  1. a)a statutory auditor (within the meaning of the 2016 Audits Regulations), the report shall be signed by the statutory auditor (or, where more than one, each statutory auditor), or (
  2. b)a statutory audit firm (within the meaning of the 2016 Audits Regulations), the report shall be signed by— (
  3. i)the statutory auditor (or, where more than one, each statutory auditor) designated by the statutory audit firm for the particular audit engagement as being primarily responsible for carrying out the statutory audit on behalf of the audit firm, (
  4. ii)in the case of a group audit, at least the statutory auditor (or, where more than one, each statutory auditor) designated by the statutory audit firm as being primarily responsible for carrying out the statutory audit at the level of the group, (iii) where more than one statutory audit firm has been simultaneously engaged, by the statutory auditors designated by the statutory audit firms for the particular audit engagement as being primarily responsible for carrying out the statutory audit on behalf of the audit firm, or (
  5. iv)in the case of a group audit, where more than one statutory audit firm has been simultaneously engaged, by the statutory auditors designated by the statutory audit firms for the particular audit engagement as being primarily responsible for carrying out the statutory audit at the level of the group, in his or her own name, for and on behalf of the audit firm.”. Amendment of section 380 of Principal Act 11. Section 380 of the Principal Act is amended, in subsection
(5), by the substitution of the following paragraph for paragraph (iii): “(iii) the person’s becoming disqualified from holding office by virtue of the 2016 Audits Regulations.”. Amendment of section 390 of Principal Act
  1. Section 390 of the Principal Act is amended by the substitution of “2016 Audits Regulations” for “European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 ( S.I. No. 220 of 2010 )”. Amendment of section 394 of Principal Act
  2. Section 394 of the Principal Act is amended, in paragraph (a), by the substitution of “2016 Audits Regulations” for “European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 ( S.I. No. 220 of 2010 )”. Amendment of section 900 of Principal Act
  3. Section 900 of the Principal Act is amended— (a) in subsection
(1)— (
  1. i)by the deletion of the definition of “2010 Audits Regulations”, (
  2. ii)in the definition of “recognised accountancy body”, by the substitution of “2016 Audits Regulations” for “2010 Audits Regulations”, and (iii) by the insertion of the following definition: “‘CEAOB’ has the meaning assigned to it by section 905
(3)(c);”, and (b) by the insertion of the following subsection after subsection
(2): “
(3)Regulation 4 (except the definitions of ‘standards’ and ‘statutory auditor’) of the 2016 Audits Regulations shall apply to the interpretation of this Chapter as that Regulation applies to the interpretation of those Regulations.”. Amendment of section 904 of Principal Act 15. Section 904 of the Principal Act is amended, in subsection
(1)— (
  1. a)in paragraph (c), by the substitution of “IAS Regulation,” for “IAS Regulation, and”, (
  2. b)in paragraph (d), by the substitution of “matters, and” for “matters.”, and (
  3. c)by the insertion of the following paragraph after paragraph (d): “(
  4. e)oversee statutory auditors and the conduct of statutory audits in accordance with the 2016 Audits Regulations and Regulation (EU) No 537/2014 and perform functions under those Regulations and that Regulation.”. Amendment of section 905 of Principal Act 16. Section 905 of the Principal Act is amended— (
  5. a)in subsection
(2)— (
  1. i)by the substitution of the following paragraph for paragraph (a): “(
  2. a)grant recognition to bodies of accountants for the purposes of the 2016 Audits Regulations, Regulation (EU) No 537/2014 and section 1441,”, (
  3. ii)by the substitution of the following paragraphs for paragraph (i): “(
  4. i)monitor the effectiveness of provisions of the 2016 Audits Regulations and Regulation (EU) No 537/2014 relating to the independence of statutory auditors, (
  5. ia)monitor developments in the market for audit services to public-interest entities as required by Regulation (EU) No 537/2014,”, and (iii) by the substitution of the following paragraphs for paragraph (n): “(
  6. ma)adopt auditing standards for the purposes of the 2016 Audits Regulations and Regulation (EU) No 537/2014, (
  7. n)oversee, in accordance with the 2016 Audits Regulations and Regulation (EU) No 537/2014, the performance of (and, where permitted by those Regulations, that Regulation or this Act, perform) the following functions with respect to statutory auditors: (
  8. i)the approval and registration of statutory auditors (including the registration of Member State audit firms); (
  9. ii)continuing education; (iii) quality assurance systems; (
  10. iv)investigative and administrative disciplinary systems,”, and (
  11. b)by the insertion of the following subsections after subsection
(2): “
(3)The Supervisory Authority shall— (
  1. a)cooperate with competent authorities in other Member States to achieve the convergence of the educational qualifications required for the approval of an individual as a statutory auditor, (
  2. b)when engaging in such operation, take into account developments in auditing and the audit profession and, in particular, convergence that has already been achieved by the profession, and (
  3. c)cooperate with the Committee of European Auditing Oversight Bodies (in this Chapter referred to as ‘CEAOB’) established under Article 30 of Regulation (EU) No 537/2014 and the competent authorities referred to in Article 20 of that Regulation in so far as such convergence relates to the statutory audit of public-interest entities.
(4)The Supervisory Authority shall— (
  1. a)cooperate within the framework of the CEAOB with a view to achieving the convergence of the requirements of the aptitude test, (
  2. b)enhance the transparency and predictability of those requirements, and (
  3. c)cooperate with the CEAOB and with the competent authorities referred to in Article 20 of Regulation (EU) No 537/2014 in so far as such convergence relates to statutory audits of public-interest entities.
(5)With regard to the cooperation that the State is required to engage in by virtue of Article 33 of the Audit Directive, the Supervisory Authority is assigned responsibility in that behalf.
(6)For the purpose of discharging the responsibility referred to in subsection
(5), the Supervisory Authority shall put in place appropriate mechanisms, including arrangements with competent authorities in other Member States.”. Amendment of section 906 of Principal Act 17. Section 906 of the Principal Act is amended— (a) in subsection
(3), by the insertion of “(including its functions under Regulation (EU) No 537/2014)” after “its functions”, and (b) in subsection
(5)— (
  1. i)in paragraph (a), by the substitution of “Chapter),” for “Chapter), or”, (
  2. ii)in paragraph (b), by the substitution of “section 905
(2)(m),” for “section 905
(2)(m).”, and (iii) by the insertion of the following paragraphs after paragraph (b): “(
  1. c)provisions of the 2016 Audits Regulations or Regulation (EU) No 537/2014, or (
  2. d)rules adopted by the Supervisory Authority under subsection
(3)concerning matters that relate to its functions under section 905
(2)(n).”. Amendment of section 907 of Principal Act 18. Section 907 of the Principal Act is amended— (a) in subsection
(2), by the insertion of “subsections (2A) and (2B) and” after “Subject to”, and (b) by the insertion of the following subsections after subsection
(2): “(2A) On and from 17 June 2016, the Minister shall not appoint a person under subsection
(2)as a director unless the Minister is satisfied that the person is knowledgeable in areas relevant to the conduct of statutory audits as specified in Schedule 1 to the 2016 Audits Regulations. (2B) On and from 17 June 2016, the Minister shall not appoint a person as a director under subsection
(2)if the person— (
  1. a)on the proposed date of his or her appointment as a director— (
  2. i)carries out statutory audits, (
  3. ii)holds voting rights in an audit firm, (iii) is a director or member of an audit firm, or (
  4. iv)is employed by or otherwise contracted with an audit firm, or (
  5. b)has, at any time during the 3 years immediately preceding the proposed date of his or her appointment as a director— (
  6. i)carried out statutory audits, (
  7. ii)held voting rights in an audit firm, (iii) was a director or member of an audit firm, or (
  8. iv)was employed by or otherwise contracted with an audit firm.”. Amendment of section 918 of Principal Act 19. Section 918 of the Principal Act is amended— (
  9. a)by the deletion of subsection
(1), and (b) by the substitution of the following subsection for subsection
(3): “
(3)Money received by the Supervisory Authority under this section may be used only for the purposes of meeting expenses properly incurred by it in performing its functions as the competent authority under the 2016 Audits Regulations, Regulation (EU) No 537/2014 or this Act (including a function referred to in section 905
(2)(n) that it may perform by virtue of Regulations 33
(2)and 33
(3)(
  1. b)of the 2016 Audit Regulations) in relation to statutory auditors of public-interest entities.”. Amendment of section 919 of Principal Act 20. Section 919 of the Principal Act is amended— (
  2. a)in subsection
(4)— (
  1. i)in paragraph (b), by the deletion of “and”, (
  2. ii)in paragraph (c), by the substitution of “934
(7), and” for “934
(7).”, and (iii) by the insertion of the following paragraph after paragraph (c): “(d) any amounts paid to the Supervisory Authority under section 935C
(1)(f)(
  1. i)or (ii).”, and (
  2. b)by the insertion of the following subsection after subsection
(5): “
(6)Amounts referred to in subsection
(4)(d) may only be used by the Supervisory Authority to fund the performance of its functions under section 935B.”. Amendment of section 930 of Principal Act 21. Section 930 of the Principal Act is amended, in subsections
(1)and
(2), by the substitution of “2016 Audits Regulations” for “2010 Audits Regulations”. Amendment of section 932 of Principal Act
  1. Section 932 of the Principal Act is amended by the substitution of the following paragraph for paragraph (a): “(a) the 2016 Audits Regulations, or”. Supplemental provisions in relation to section 934 (including as concerns its relationship to provisions of 2016 Audits Regulations)
  2. The Principal Act is amended by the substitution of the following section for section 935: “935.
(1)For the avoidance of doubt, the following matters may, without prejudice to the generality of the provisions of section 934, be the subject of an investigation by the Supervisory Authority under that section, namely matters— (
  1. a)in relation to which a recognised accountancy body has decided not to withdraw a person’s approval under the 2016 Audits Regulations as a statutory auditor or audit firm, or (
  2. b)which either— (
  3. i)have not been considered by a recognised accountancy body as grounds for the withdrawal of a person’s approval under those Regulations as a statutory auditor or audit firm, or (
  4. ii)having been considered by it as such grounds, are not considered by it to disclose a prima facie case for proceeding further.
(2)Where— (
  1. a)those matters are the subject of such an investigation by the Supervisory Authority, and (
  2. b)a breach of standards is found by the Supervisory Authority, section 934
(7)shall be read as requiring or enabling (depending on whether the breach of standards found falls within Part 4 or Chapter 2 of Part 8 of the 2016 Audits Regulations) the Supervisory Authority to withdraw the approval under those Regulations of the person concerned as a statutory auditor or audit firm.
(3)Where such an approval is withdrawn by the Supervisory Authority, the following provisions of the 2016 Audits Regulations shall, with any necessary modifications, apply (and not subsections
(10)and
(11)of section 934) to that withdrawal, namely Regulation 52
(14)to
(17)(or, as the case may be, Regulation 53
(14)to
(17)) and Regulation 54.
(4)Subsection
(2)does not prejudice the imposition, in the circumstances concerned, by the Supervisory Authority of another sanction referred to in section 934
(7)in addition to a withdrawal of approval (where withdrawal of the approval is mandatory under the 2016 Audits Regulations) or in lieu of a withdrawal of approval (where such withdrawal is not so mandatory).
(5)For the purposes of section 934, ‘member’, in addition to the meaning given to that expression by section 900
(1), includes, in relation to a prescribed accountancy body that is a recognised accountancy body, an individual or firm who or which, though not a member of the recognised accountancy body, is an individual or firm in relation to whom that body may exercise powers under the 2016 Audits Regulations.”. Amendment of Principal Act 24. The Principal Act is amended by the insertion of the following sections after section 935: “Interpretation of sections 935A to 935D and 941A 935A.
(1)In this section and sections 935B to 935D and 941A— ‘client’ includes an individual, a body corporate, an unincorporated body of persons and a partnership; ‘publication sanction’, in relation to a statutory auditor or relevant director, means the publication in accordance with section 935D
(1)of the auditor’s or director’s particulars referred to in that section together with the other related particulars referred to in that section; ‘relevant contravention’, in relation to a statutory auditor, means a contravention by the statutory auditor of a provision of— (a) the 2016 Audits Regulations, (b) Regulation (EU) No 537/2014, or (c) section 336, 337 or 935C
(3); ‘relevant decision’— (a) means a decision under section 935B
(6)by the Supervisory Authority that a statutory auditor has committed a relevant contravention, and (
  1. b)if, in consequence of that decision— (
  2. i)the Supervisory Authority decides under that section to impose a relevant sanction on the auditor, or (
  3. ii)the Director of Corporate Enforcement decides under that section to impose a relevant sanction on a relevant director, includes the decision to impose that sanction; ‘relevant director’ means a director or former director of a public-interest entity; ‘relevant person’, in relation to an investigation of a statutory auditor, means— (
  4. a)the statutory auditor, (
  5. b)if the statutory auditor is an individual, a person who is or was an employee or agent of the statutory auditor, (
  6. c)if the statutory auditor is an audit firm, a person who is or was an officer, member, partner, employee or agent of the statutory auditor, (
  7. d)a client or former client of the statutory auditor, (
  8. e)if the client or former client is a body corporate, a person who is or was an officer, employee or agent of the client or former client, or (
  9. f)any person whom the Supervisory Authority reasonably believes has information or documents relating to the investigation other than information or documents the disclosure of which is prohibited or restricted by law; ‘relevant sanction’— (
  10. a)in relation to a statutory auditor, means a sanction referred to in section 935C
(1)(a)(i), (b), (c), (
  1. d)or (f)(i), and (
  2. b)in relation to a relevant director, means a sanction referred to in section 935C
(1)(a)(ii), (e) or (f)(ii); ‘statutory auditor’ includes a former statutory auditor.
(2)A reference in this section and sections 935B to 935D and 941A to the imposition of a relevant sanction on a statutory auditor or relevant director includes a reference to the taking of an administrative measure against the statutory auditor or relevant director. Investigation of possible relevant contraventions 935B.
(1)If, in the Supervisory Authority’s opinion, Regulation 33
(2)or
(3)of the 2016 Audits Regulations permits it to undertake an investigation into a possible relevant contravention committed by a statutory auditor, the Authority may do so— (a) following a complaint, or (b) on its own initiative.
(2)For the purposes of an investigation under this section, the Supervisory Authority may require a relevant person to do one or more of the following: (
  1. a)produce to the Supervisory Authority all books or documents relating to the investigation that are in the relevant person’s possession or control; (
  2. b)attend before the Supervisory Authority; (
  3. c)give the Supervisory Authority any other assistance in connection with the investigation that the relevant person is reasonably able to give.
(3)For the purposes of an investigation under this section, the Supervisory Authority may— (
  1. a)examine on oath, either by word of mouth or on interrogatories in writing, a relevant person, (
  2. b)administer oaths for the purposes of the examination, and (
  3. c)record, in writing, the answers of a person so examined and require that person to sign them.
(4)The Supervisory Authority may certify the refusal or failure to the court if a relevant person refuses or fails to do one or more of the following: (
  1. a)produce to the Supervisory Authority any book or document that it is the person’s duty under this section to produce; (
  2. b)attend before the Supervisory Authority when required to do so under this section; (
  3. c)answer a question put to the person by the Supervisory Authority with respect to the matter under investigation.
(5)On receiving a certificate of refusal or failure concerning a relevant person, the court may enquire into the case and after hearing any evidence that may be adduced, may do one or more of the following: (
  1. a)direct that the relevant person attend or re-attend before the Supervisory Authority or produce particular books or documents or answer particular questions put to him or her by the Supervisory Authority; (
  2. b)direct that the relevant person need not produce particular books or documents or answer particular questions put to him or her by the Supervisory Authority; (
  3. c)make any other ancillary or consequential order or give any other direction that the court thinks fit.
(6)(a) Subject to subsection
(12)and section 935C
(2), if the Supervisory Authority finds that the statutory auditor has committed a relevant contravention, the Supervisory Authority may impose such relevant sanction on the auditor as the Supervisory Authority considers appropriate in all the relevant circumstances. (b) Subject to subsection
(12)and section 935C
(2), if the Supervisory Authority finds that the statutory auditor has committed a relevant contravention, and the Director of Corporate Enforcement finds that a relevant director engaged in conduct giving rise (whether in whole or in part) to that contravention, the Director of Corporate Enforcement may impose such relevant sanction on the relevant director as the Director of Corporate Enforcement considers appropriate in all the relevant circumstances.
(7)Subject to subsection
(8), the statutory auditor or relevant director who is the subject of a relevant decision made under subsection
(6)may appeal to the court against the decision.
(8)An appeal under subsection
(7)shall be brought within 3 months after the date on which the statutory auditor or relevant director concerned was notified of that decision by— (
  1. a)in so far as the relevant decision falls within paragraph (
  2. a)or (b)(
  3. i)of the definition of ‘relevant decision’, the Supervisory Authority, and (
  4. b)in so far as the relevant decision falls within paragraph (b)(
  5. ii)of the definition of ‘relevant decision’, the Director of Corporate Enforcement.
(9)The production of any books or documents under this section by a person who claims a lien on them does not prejudice the lien.
(10)Any information produced or answer given by a relevant person in compliance with a requirement under this section may be used in evidence against the relevant person in any proceedings whatsoever, save proceedings for an offence (other than perjury in respect of such an answer).
(11)A finding or relevant decision of the Supervisory Authority or Director of Corporate Enforcement under this section is not a bar to any civil or criminal proceedings against the statutory auditor or relevant director who is the subject of the finding or relevant decision.
(12)A relevant decision, in so far as it relates to the imposition of a relevant sanction on a statutory auditor or relevant director, shall not take effect unless the relevant decision is confirmed by the court under section 941
(2)(a) or 941A
(2).
(13)Subsections
(14)and
(15)apply if— (
  1. a)the Supervisory Authority finds that the statutory auditor has committed a relevant contravention, and (
  2. b)that contravention relates, whether directly or indirectly, to the audit of a public-interest entity.
(14)The Supervisory Authority shall, as soon as is practicable, give the Director of Corporate Enforcement— (
  1. a)particulars of the statutory auditor, (
  2. b)particulars of the relevant contravention, and (
  3. c)particulars of the public-interest entity.
(15)The Supervisory Authority shall, in addition to complying with subsection
(14), give the Director of Corporate Enforcement such information and documents and assistance as the Director may reasonably require for the Director to decide whether or not— (a) to investigate a relevant director, or (b) to impose, under subsection
(6)(b), a relevant sanction on a relevant director, or both. Sanctions which Supervisory Authority or Director of Corporate Enforcement may impose 935C.
(1)Subject to section 935B
(6)and
(12)and subsection
(2), the Supervisory Authority may impose on a statutory auditor, and the Director of Corporate Enforcement may impose on a relevant director, one or more of the following sanctions in relation to a relevant contravention committed by the statutory auditor: (
  1. a)a direction— (
  2. i)by the Supervisory Authority to the statutory auditor that the auditor cease the conduct giving rise (whether in whole or in part) to the contravention and abstain from any repetition of that conduct, or (
  3. ii)a direction by the Director of Corporate Enforcement to the relevant director that the director cease the conduct giving rise (whether in whole or in part) to the contravention and abstain from any repetition of that conduct; (
  4. b)a direction by the Supervisory Authority to the statutory auditor (being any one or more of a statutory auditor, audit firm or key audit partner) banning him, her or it, for the period specified in the direction (being a period of not more than 3 years’ duration), from carrying out statutory audits or signing statutory auditors’ reports, or both; (
  5. c)a declaration by the Supervisory Authority that the statutory auditors’ report concerned does not meet the requirements of section 336 or 337 or, where applicable, Article 10 of Regulation (EU) No 537/2014; (
  6. d)if the statutory auditor is an audit firm, a direction by the Supervisory Authority to an officer, member or partner of the audit firm banning the officer, member or partner, for the period specified in the direction (being a period of not more than 3 years’ duration), from performing functions in audit firms or public-interest entities; (
  7. e)a direction by the Director of Corporate Enforcement to the relevant director banning the director, for the period specified in the direction (being a period of not more than 3 years’ duration), from performing functions in audit firms or public-interest entities; (
  8. f)a direction— (
  9. i)subject to paragraphs
(6),
(8),
(10)and
(12), by the Supervisory Authority to the statutory auditor to pay, as an administrative pecuniary sanction, a sum, as specified in the direction but not exceeding €100,000 in the case of a statutory auditor who is an individual or, in the case of a statutory auditor which is an audit firm, not exceeding €500,000, to the Supervisory Authority, or (ii) subject to paragraphs
(7),
(9),
(11)and
(13), by the Director of Corporate Enforcement to the relevant director to pay, as an administrative pecuniary sanction, a sum, as specified in the direction but not exceeding €100,000, to the Supervisory Authority.
(2)The relevant circumstances referred to in section 935B
(6)(
  1. a)or (
  2. b)include, where appropriate, one or more of the following: (
  3. a)the gravity and duration of the relevant contravention; (
  4. b)the degree of responsibility of the statutory auditor or relevant director; (
  5. c)the financial strength of the statutory auditor or relevant director (for example, as indicated by the total turnover of the statutory auditor if the auditor is not an individual, or, in the case of a statutory auditor who is an individual or in the case of the relevant director, the annual income of the individual or relevant director); (
  6. d)the amount of profits gained or losses avoided by the statutory auditor or relevant director in consequence of the relevant contravention, in so far as they can be determined; (
  7. e)the level of cooperation of the statutory auditor or relevant director with the Supervisory Authority; (
  8. f)previous relevant contraventions committed by the statutory auditor or previous impositions of relevant sanctions on the relevant director.
(3)A person the subject of a direction under subsection
(1)shall comply with the direction.
(4)The Supervisory Authority shall immediately communicate to the CEAOB particulars of— (a) any direction given by the Authority under subsection
(1)(
  1. b)or (d), and (
  2. b)any direction given by the Director of Corporate Enforcement under subsection
(1)(e).
(5)The Supervisory Authority shall, as soon as may be after the end of a year, give to the CEAOB aggregated information in relation to— (
  1. a)all relevant sanctions imposed by it or the Director of Corporate Enforcement during the year in accordance with the 2016 Audits Regulations and this Act, and (
  2. b)all publication sanctions imposed by it during the year in accordance with the 2016 Audits Regulations and this Act.
(6)If the Supervisory Authority decides to impose an administrative pecuniary sanction on a statutory auditor under subsection
(1)(f)(i), the Supervisory Authority may not impose an amount— (
  1. a)that would be likely to cause the statutory auditor to cease business, or (
  2. b)that would, if the statutory auditor is an individual, be likely to cause the statutory auditor to be adjudicated bankrupt.
(7)If the Director of Corporate Enforcement decides to impose an administrative pecuniary sanction on a relevant director under subsection
(1)(f)(ii), the Director of Corporate Enforcement may not impose an amount that would be likely to cause the relevant director to be adjudicated bankrupt.
(8)If the conduct engaged in by the statutory auditor has given rise (whether in whole or in part) to 2 or more relevant contraventions, the Supervisory Authority may not impose more than one administrative pecuniary sanction under subsection
(1)(f)(i) on the statutory auditor in respect of the same conduct.
(9)If the conduct engaged in by the relevant director has given rise (whether in whole or in part) to 2 or more relevant contraventions, the Director of Corporate Enforcement may not impose more than one administrative pecuniary sanction under subsection
(1)(f)(ii) on the relevant director in respect of the same conduct.
(10)If the Supervisory Authority imposes an administrative pecuniary sanction under subsection
(1)(f)(i) on a statutory auditor and the conduct engaged in by the statutory auditor that has given rise (whether in whole or in part) to the relevant contravention is an offence under the law of the State, the statutory auditor shall not be liable to be prosecuted or punished for the offence under that law.
(11)If the Director of Corporate Enforcement imposes an administrative pecuniary sanction under subsection
(1)(f)(ii) on a relevant director and the conduct engaged in by the relevant director that has given rise (whether in whole or in part) to the relevant contravention is an offence under the law of the State, the relevant director shall not be liable to be prosecuted or punished for the offence under that law.
(12)The Supervisory Authority may not impose an administrative pecuniary sanction under subsection
(1)(f)(
  1. i)on a statutory auditor if— (
  2. a)the statutory auditor has been charged with having committed an offence under a law of the State and has either been found guilty or not guilty of having committed the offence, and (
  3. b)the offence involves the conduct engaged in by the statutory auditor that has given rise (whether in whole or in part) to the relevant contravention.
(13)The Director of Corporate Enforcement may not impose an administrative pecuniary sanction under subsection
(1)(f)(
  1. ii)on a relevant director if— (
  2. a)the relevant director has been charged with having committed an offence under a law of the State and has either been found guilty or not guilty of having committed the offence, and (
  3. b)the offence involves the conduct engaged in by the relevant director that has given rise (whether in whole or in part) to the relevant contravention. Publication of relevant sanction imposed, etc 935D.
(1)Subject to subsections
(2)and
(3), the Supervisory Authority shall, in so far as a relevant decision imposes a relevant sanction on a statutory auditor or relevant director, as soon as is practicable after— (a) that decision has been confirmed by the court under section 941
(2)(a) or 941A
(2), or (b) a decision of the court under section 941
(2)(b) has been made to impose a different relevant sanction on the statutory auditor or relevant director, publish on its website particulars of the relevant contravention for which the relevant sanction was imposed, particulars of the relevant sanction imposed and particulars of the statutory auditor or relevant director on whom the relevant sanction was imposed.
(2)Subject to subsection
(4), if there is an appeal from the court from a confirmation referred to in subsection
(1)(a), or a decision referred to in subsection
(1)(b), the Supervisory Authority shall from time to time, as it considers appropriate, publish particulars on its website of the status or outcome of the appeal.
(3)The Supervisory Authority shall publish particulars referred to in subsection
(1)on an anonymous basis on its website in any one or more of the following circumstances: (a) the Supervisory Authority, following an assessment of the proportionality of the publication of those particulars in accordance with subsection
(1)in so far as personal data is concerned, is of the opinion that, in relation to the relevant sanction imposed on a statutory auditor who is an individual or on a relevant director, such publication would be disproportionate; (b) the Supervisory Authority is of the opinion that the publication of those particulars in accordance with subsection
(1)would jeopardize the stability of financial markets or an ongoing criminal investigation; (c) the Supervisory Authority is of the opinion that the publication of those particulars in accordance with subsection
(1)would cause disproportionate damage to the statutory auditor or relevant director concerned.
(4)Subsection
(2)shall not apply in any case where subsection
(3)applies.
(5)The Supervisory Authority shall ensure that particulars published on its website in accordance with subsection
(1)or
(2)remain on its website for at least 5 years.”. Amendment of section 938 of Principal Act 25. Section 938 of the Principal Act is amended— (a) in subsection
(1), by the substitution of “, 935 or 935B” for “or 935”, (b) in subsection
(3), by the insertion of “, 935B” after “935”, and (c) in subsection
(4), by the substitution of “, 935 and 935B” for “and 935”. Amendment of section 941 of Principal Act 26. Section 941 of the Principal Act is amended, in subsection
(1), by the substitution of “, 934
(10)or 935B
(7)” for “or section 934
(10)”. Application to court to confirm decision to impose relevant sanction 27. The Principal Act is amended by the insertion of the following section after section 941: “941A.
(1)Where a statutory auditor or relevant director does not, within the period allowed under section 935B
(8), appeal to the court against a relevant decision made by the Supervisory Authority or Director of Corporate Enforcement to impose a relevant sanction on the auditor or director, the Supervisory Authority or Director of Corporate Enforcement, as appropriate, shall, as soon as is practicable after the expiration of that period and on notice to the auditor or director, make an application in a summary manner to the court for confirmation of the relevant decision.
(2)The court shall, on the hearing of an application under subsection
(1), confirm the relevant decision the subject of the application unless the court considers that there is good reason not to do so.”. Amendment of section 1097 of Principal Act 28. Section 1097 of the Principal Act is amended— (
  1. a)by the substitution of “Regulation 115” for “Regulation 91”, and (
  2. b)by the substitution of “2016 Audits Regulations” for “European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010”. Amendment of section 1305 of Principal Act 29. Section 1305 of the Principal Act is amended, in subsection
(3), in paragraph (b), by the substitution of “the Audit Directive (within the meaning of the 2016 Audits Regulations)” for “Directive 2006/43/EC”. Amendment of section 1441 of Principal Act 30. Section 1441 of the Principal Act is amended, in subsection
(3), by the substitution of the following paragraph for paragraph (f): “(
  1. f)a person who is disqualified under Regulation 93 of the 2016 Audits Regulations for appointment as statutory auditor of a company that is a subsidiary or holding company of the society,”. Amendment of section 1448 of Principal Act 31. Section 1448 of the Principal Act is amended— (
  2. a)by the substitution of the following subsection for subsection
(1): “
(1)In this section— ‘third-country audit entity’ has the same meaning as in Regulation 4 of the 2016 Audits Regulations; ‘third-country auditor’ has the same meaning as in Regulation 4 of the 2016 Audits Regulations.”, and (b) in subsection
(2)— (
  1. i)by the substitution of “sections 935A to 941A shall apply (with such modification to those sections as are specified in the regulations)” for “Chapter 3 of Part 8 of the 2010 Audits Regulations”, and (
  2. ii)by the substitution of “Regulation 135
(3)of the 2016 Audits Regulations” for “Regulation 113
(2)of the 2010 Audits Regulations”. PART 3 DESIGNATION OF COMPETENT AUTHORITY AND ASSIGNMENT OF FUNCTIONS Designation of competent authority 32.
(1)Subject to paragraph
(2), the Supervisory Authority is designated as the competent authority for the oversight of statutory auditors and audit firms in accordance with the Audit Directive and Regulation (EU) No 537/2014.
(2)Subject to paragraph
(4), the Director of Corporate Enforcement is designated as the competent authority with the power to take the administrative measures or impose the sanctions referred to in Article 30 of the Audit Directive (except the sanction referred to in Article 30a
(1)(b) of the Audit Directive) in so far as such administrative measures are taken against, or such sanctions are imposed on, directors of public-interest entities.
(3)The Supervisory Authority is designated as the competent authority for the purposes of— (a) public oversight, quality assurance, investigations and penalties of third-country auditors and audit entities registered under Regulation 135
(1), and (b) public oversight, investigations and penalties of third-country auditors and audit entities referred to in Regulation 135
(7),
(8)and
(9).
(4)(a) Subject to subparagraph (b), to the extent that the Director of Corporate Enforcement is a competent authority by virtue of paragraph
(2), a reference in these Regulations (other than this Regulation) to the Supervisory Authority shall include a reference to the Director of Corporate Enforcement. (
  1. b)The Supervisory Authority shall perform the functions under these Regulations that would, but for this paragraph, otherwise fall to be performed by the Director of Corporate Enforcement by virtue of being the competent authority referred to in subparagraph (a). (
  2. c)The Director of Corporate Enforcement shall cooperate with the Supervisory Authority so as to enable the Supervisory Authority to perform the functions referred to in subparagraph (b).
(5)The Supervisory Authority shall, as soon as is practicable on or after 17 June 2016, publish on its website information on the designation of competent authorities effected by this Regulation between the Supervisory Authority and the Director of Corporate Enforcement. Assignment of functions 33.
(1)Subject to paragraph
(3), the recognised accountancy bodies shall perform the functions referred to in section 905
(2)(n) of the Companies Act 2014 in accordance with these Regulations.
(2)Subject to Regulation 32
(2), the Supervisory Authority shall perform the functions referred to in points (a), (b) and (c) of Article 24
(1)of Regulation (EU) No 537/2014.
(3)The Supervisory Authority may perform a function (whether in whole or in part or in a particular instance) referred to in section 905
(2)(
  1. n)of the Companies Act 2014 instead of the recognised accountancy body concerned if— (
  2. a)the Supervisory Authority— (
  3. i)is satisfied that the body has failed to perform that function in the circumstances concerned, and (
  4. ii)is of the opinion that it is in the public interest that it perform that function in those circumstances, or (
  5. b)without prejudice to the generality of subparagraph (a), in the case of investigative and administrative disciplinary systems referred to at subparagraph (
  6. iv)of that section, the Supervisory Authority is of the opinion that it is in the public interest that it perform that function in the circumstances concerned.
(4)The costs incurred by the Supervisory Authority in performing, pursuant to paragraph
(3), a function referred to in section 905
(2)(n) of the Companies Act 2014 instead of the recognised accountancy body concerned shall be defrayed by that body except where money referred to in section 918
(3)of the Companies Act 2014 may be used, in accordance with that section 918
(3), to defray such costs; for the purposes of this paragraph, in default of payment of the amount of such costs to the Supervisory Authority, the Authority may recover that amount as a simple contract debt in any court of competent jurisdiction.
(5)The Supervisory Authority shall, as soon as is practicable on or after 17 June 2016, publish on its website information on the assignment of functions effected by this Regulation between the Supervisory Authority and the recognised accountancy bodies. Annual audit programme and activity report 34.
(1)The Supervisory Authority shall, not later than 4 months after the end of each financial year, prepare a report (in these Regulations referred to as the “annual audit programme and activity report”) in accordance with this Regulation on, inter alia, its oversight functions referred to in Regulation 32 performed during that year.
(2)The AAPA report shall contain the following information: (
  1. a)an activity report on the functions performed by the recognised accountancy bodies during the financial year to which the AAPA report relates; (
  2. b)a work programme concerning the oversight functions referred to in Regulation 32 that the Supervisory Authority proposes to perform during the financial year immediately following the financial year to which the AAPA report relates; (
  3. c)an activity report regarding the functions of the Supervisory Authority under Regulation (EU) No 537/2014 during the financial year to which the AAPA report relates; (
  4. d)a work programme regarding the functions of the Supervisory Authority under Regulation (EU) No 537/2014 that the Supervisory Authority proposes to perform during the financial year immediately following the financial year to which the AAPA report relates; (
  5. e)a report for the financial year to which the AAPA report relates on the overall results of the quality assurance system, including— (
  6. i)information on recommendations issued, follow-up on the recommendations, supervisory measures taken and relevant sanctions and publication sanctions (within the meaning of section 935A of the Companies Act 2014 ) imposed, and (
  7. ii)quantitative information and other key performance information on financial resources and staffing, and the efficiency and effectiveness of the quality assurance system.
(3)The AAPA report may form part of the annual report required under section 928 of the Companies Act 2014 in respect of the same financial year to which the AAPA report relates.
(4)The Supervisory Authority shall cause the AAPA report to be published on its website not later than 1 July of the year immediately following the financial year to which the report relates. Operation of certain provisions with regard to particular recognised accountancy bodies 35.
(1)This Regulation applies where the provision referred to in paragraph
(2),
(3),
(4)or
(5)uses the expression “recognised accountancy body” without qualification and that provision does not, by its express terms, itself indicate which recognised accountancy body is being referred to.
(2)A provision of these Regulations that confers a function on a recognised accountancy body in relation to a statutory auditor or audit firm shall be read as conferring that function— (
  1. a)in the case of a statutory auditor who is not a member of a statutory audit firm, on the recognised accountancy body of which the statutory auditor is a member, (
  2. b)in the case of statutory auditor who is a member of a statutory audit firm, on the recognised accountancy body of which the statutory audit firm is a member, and (
  3. c)in the case of a statutory audit firm, on the recognised accountancy body of which the statutory audit firm is a member.
(3)With regard to the function conferred by Regulation 37 on a recognised accountancy body in relation to an individual or firm, paragraph
(2)applies as if, for each reference in that paragraph to a statutory auditor or audit firm (as the case may be), there were substituted a reference to the individual or firm, as appropriate.
(4)A provision of these Regulations requiring that an act is to be done, or enabling an act to be done, by a person (other than a person referred to in paragraph
(5)(b)) in relation to a recognised accountancy body shall be read as requiring or enabling it to be done by the person in relation to— (
  1. a)if the person is not a member of a statutory audit firm, the recognised accountancy body of which the person is a member, (
  2. b)if the person is a member of a statutory audit firm, the recognised accountancy body of which the statutory audit firm is a member, and (
  3. c)if the person is a statutory audit firm, the recognised accountancy body of which the statutory audit firm is a member.
(5)Paragraph
(6)applies in the case— (a) of a provision of the kind referred to in paragraph
(2),
(3)or
(4), and (b) where the provision falls to be applied to a Member State auditor, a Member State audit firm, a third-country auditor or any other person who or which is not a member of a recognised accountancy body (or, as the case may be, the firm of which the person is a member is not a member of a recognised accountancy body).
(6)The recognised accountancy body that shall perform the function concerned or, as the case may be, in relation to which the act concerned is required or enabled to be done shall be determined— (
  1. a)by reference to arrangements, in writing entered into by the recognised accountancy bodies amongst themselves for the purpose (which arrangements those bodies are empowered by this paragraph to enter into), or (
  2. b)in default of— (
  3. i)such arrangements being entered into, or (
  4. ii)the provision of such arrangments dealing with the particular case falling to be determined, by the Supervisory Authority.
(7)On a determination being made by the Supervisory Authority for the purposes of paragraph
(6)(b), a direction in writing, reflecting the terms of the determination, shall be given by it (which direction the Supervisory Authority is empowered by this paragraph to give).
(8)Arrangements shall not be entered into under paragraph
(6)(a) by the recognised accountancy bodies save after consultation by them with the Supervisory Authority.
(9)Subject to paragraph
(10), in consequence of the operation of this Regulation, the function of withdrawal of a particular approval of a statutory auditor or audit firm falls to be discharged by a recognised accountancy body (in this Regulation referred to as the “first-mentioned accountancy body”) that is different from the recognised accountancy body (in this Regulation referred to as the “second-mentioned accountancy body”) that granted the approval- (
  1. a)the first-mentioned accountancy body shall notify in writing the second-mentioned accountancy body of the proposal by it to withdraw the approval, and (
  2. b)the second-mentioned accountancy body shall provide such assistance by way of provision of information or clarification of any matter, to the first-mentioned accountancy body as the latter considers it may require so as to inform itself better on any issue bearing on the performance of the function of withdrawal.
(10)The procedures adopted for the purposes of paragraph
(9)by the first-mentioned accountancy body and the second-mentioned accountancy body shall be such as will— (
  1. a)avoid any unnecessary delay in the performance of the function of withdrawal, and (
  2. b)respect the requirements of procedural fairness as concerns the auditor or audit firm concerned being able to answer any part of the case made against him, her or it that is informed by those procedures being employed.
(11)In a case falling within paragraphs
(9)and
(10), if the approval concerned is withdrawn, the first-mentioned accountancy body, in addition to making the notifications required by Regulation 55 and (where it applies) Regulation 56, shall notify the second-mentioned accountancy body of the withdrawal of approval. Conflicts of interest to be avoided 36.
(1)The persons to whom this paragraph applies shall organise themselves in such a manner so that conflicts of interest are avoided in the performance of their respective functions under these Regulations.
(2)Paragraph
(1)applies to— (
  1. a)the Supervisory Authority, (
  2. b)the Director of Corporate Enforcement, (
  3. c)the Registrar of Companies, and (
  4. d)the recognised accountancy bodies. PART 4 APPROVAL OF STATUTORY AUDITORS AND AUDIT FIRMS, PROHIBITION ON UNAPPROVED PERSONS ACTING AS AUDITOR, ETC. Chapter 1 Approval of Statutory Auditors and Audit Firms Applications for approval, general principle as to good repute, etc. 37.
(1)A recognised accountancy body may, on application made to it by an individual or firm, approve, under these Regulations, the applicant as a statutory auditor or audit firm.
(2)A recognised accountancy body may, on foot of an application under paragraph
(1), grant approval under these Regulations only to— (
  1. a)individuals, or (
  2. b)firms, who or which are of good repute.
(3)A recognised accountancy body may, on application made to it by a third-country auditor and in accordance with Regulation 134, approve, under these Regulations, the applicant as a statutory auditor.
(4)Paragraph
(5)applies in the case of an application under paragraph
(1)— (
  1. a)by a firm that is a Member State audit firm in the circumstances where it is not seeking registration in accordance with Regulation 38, or (
  2. b)by a Member State auditor.
(5)For the purposes of this Regulation, the fact that the applicant is a Member State audit firm or Member State auditor shall constitute conclusive evidence that the applicant is of good repute unless, arising out of the cooperation referred to in paragraph
(6), a counterpart authority in the Member State where the applicant is approved as a statutory audit firm or auditor has notified the Supervisory Authority or a recognised accountancy body that the counterpart authority has reasonable grounds for believing that the good repute of the audit firm or auditor has been seriously compromised.
(6)The cooperation referred to in paragraph
(5)is the cooperation that the State is required to engage in by virtue of Chapter VIII of the Audit Directive.
(7)On approving a person as a statutory auditor or audit firm, the recognised accountancy body shall assign an individual identification number to the person and a record in writing shall be maintained by the recognised accountancy body of all such numbers assigned by it under this paragraph. Basis on which audit firms approved in other Member States may carry out audits in State 38.
(1)An audit firm which is approved in another Member State shall be entitled to carry out statutory audits in the State if the key audit partner who carries out those audits on behalf of the audit firm, both at the time of registration (in accordance with paragraph
(2)) and at all times during the registration of the firm, complies with the requirements of Regulations 37 to 45.
(2)(a) An audit firm that wishes to carry out statutory audits in the State where the State is not its home Member State shall, before carrying out any such audit, register with the recognised accountancy body with which the key audit partner referred to in paragraph
(1)is approved. (b) The recognised accountancy body shall ensure that an audit firm which complies with paragraph
(1)is registered in accordance with the requirements of Part 6 and Schedule 2.
(3)(
  1. a)The recognised accountancy body shall register the audit firm if it is satisfied that the audit firm is registered with the counterpart authority in the audit firm’s home Member State. (
  2. b)Where the recognised accountancy body intends to rely on a certificate, issued by the counterpart authority in the home Member State, attesting to the registration of the audit firm in the home Member State, the recognised accountancy body may require that such certificate be issued on a date falling within the 3 months immediately preceding that date on which the recognised accountancy body is given that certificate.
(4)On registering the audit firm, the recognised accountancy body shall assign an individual identification number to the firm and a record in writing shall be maintained by the recognised accountancy body of all such numbers assigned by it under this paragraph.
(5)The recognised accountancy body shall inform the counterpart authority in the home Member State of the registration of the audit firm.
(6)Where the Supervisory Authority or a recognised accountancy body receives a notification from another Member State that an audit firm whose home Member State is the State has registered with the counterpart authority in the host Member State, the Supervisory Authority or recognised accountancy body (as the case may
  1. be)shall ensure that the registration is recorded in the public register. Restriction as to persons who may carry out statutory audits 39. Statutory audits shall be carried out only by— (
  2. a)auditors or audit firms that are approved under these Regulations, or (
  3. b)audit firms registered in accordance with Regulation 38. Restriction on acting as statutory auditor 40. A person shall not— (
  4. a)act as a statutory auditor, (
  5. b)describe himself or herself as a statutory auditor, or (
  6. c)so hold himself or herself out as to indicate, or be reasonably understood to indicate, that he or she is a statutory auditor, unless he or she has been approved in accordance with these Regulations. Restriction on acting as statutory audit firm 41. A firm shall not— (
  7. a)act as a statutory audit firm, (
  8. b)describe itself as a statutory audit firm, or (
  9. c)so hold itself out as to indicate, or be reasonably understood to indicate, that it is a statutory audit firm, unless it has been approved in accordance with these Regulations or registered in accordance with Regulation 38. Offence for contravening Regulation 39, 40 or 41 42. A person who contravenes Regulation 39, 40 or 41 shall be guilty of an offence and shall be liable— (
  10. a)on a summary conviction, to a class A fine, or (
  11. b)on conviction on indictment, to a fine not exceeding €50,000 or imprisonment for a term not exceeding 12 months or both. Conditions for approval as statutory auditor 43. A person shall not be eligible for approval as a statutory auditor unless he or she is— (
  12. a)a member of a recognised accountancy body and holds an appropriate qualification as referred to in Regulation 45, (
  13. b)a Member State auditor and complies with Regulation 49, or (
  14. c)a third-country auditor and complies with Regulations 49 and 134. Transitional provisions 44.
(1)Subject to Regulations 52 and 143, a deemed approval of a person as a statutory auditor referred to in Regulation 25
(2)of the 2010 Audits Regulations that was in force immediately before 17 June 2016 shall continue in force under these Regulations as if it were a deemed approval of that person as a statutory auditor under these Regulations.
(2)Subject to Regulations 53 and 143, a deemed approval of a firm as a statutory audit firm under Regulation 27
(4)of the 2010 Audits Regulations that was in force immediately before 17 June 2016 shall continue in force under these Regulations as if it were a deemed approval of that firm as a statutory audit firm under these Regulations. Appropriate qualification for purpose of Regulation 43(a) 45.
(1)An individual holds an appropriate qualification, as required by Regulation 43(a), if he or she holds a qualification granted by a recognised accountancy body whose standards relating to training and qualifications for the approval of a person as a statutory auditor are not less than those specified in Schedule 1.
(2)In paragraph
(1), “qualification” means a qualification to undertake an audit of individual accounts and group accounts in so far as required by European Union law. Conditions for approval as statutory audit firm 46.
(1)In this Regulation, references to a firm include references to a Member State audit firm if the firm is not seeking registration in accordance with Regulation 38.
(2)A firm shall not be eligible for approval as a statutory audit firm unless— (
  1. a)the individuals who carry out statutory audits in the State on behalf of the firm are approved as statutory auditors in accordance with these Regulations, (
  2. b)the majority of the voting rights in the firm are held by— (
  3. i)individuals who are eligible for approval in the State or in any other Member State as statutory auditors, (
  4. ii)audit firms approved as statutory audit firms in the State or in any other Member State, or (iii) a combination of such individuals and audit firms, and (
  5. c)subject to paragraph
(3), the majority of the members of the administrative or management body of the firm are— (
  1. i)individuals who are eligible for approval in the State or in any other Member State as statutory auditors, (
  2. ii)audit firms approved as statutory audit firms in the State or in any other Member State, or (iii) a combination of such individuals and audit firms.
(3)Where the administrative or management body of a firm has no more than 2 members, then, for the purposes of subparagraph (c) of paragraph
(2), one of those members shall satisfy at least the requirements of that subparagraph. Powers of Director of Corporate Enforcement 47.
(1)The Director of Corporate Enforcement may demand of a person— (
  1. a)acting as a statutory auditor or audit firm of a company, or (
  2. b)purporting to have obtained approval under these Regulations, or registration in accordance with Regulation 38, to so act, the production of evidence of the person’s approval under these Regulations or, if applicable, registration in accordance with Regulation 38 in respect of any period during which the person so acted or purported to have obtained such approval.
(2)If the person concerned refuses or fails to produce the evidence referred to in paragraph
(1)within 30 days after the date of the demand referred to in that paragraph, or such longer period as the Director of Corporate Enforcement may allow, the person shall be guilty of an offence and shall be liable— (a) on summary conviction, to a class A fine, or (b) on conviction on indictment, to a fine not exceeding €12,500.
(3)In a prosecution for an offence under this Regulation, it shall be presumed, until the contrary is shown, that the defendant did not, within 30 days, or any longer period allowed, after the day on which the production was demanded, produce evidence in accordance with paragraph
(1). Evidence in prosecutions under Regulation 47 48.
(1)Subject to paragraph
(2), in proceedings for an offence under Regulation 47, the production to the court of a certificate purporting to be signed by a person on behalf of a recognised accountancy body and stating that the defendant is not approved under these Regulations or, if applicable, is not registered in accordance with Regulation 38, by that recognised accountancy body shall be sufficient evidence, until the contrary is shown by the defendant, that the defendant is not so approved or registered, as the case may be.
(2)Paragraph
(1)shall not apply unless a copy of the certificate concerned is served by the prosecution on the defendant, by registered post, not later than 28 days before the day the certificate is produced in court in the proceedings concerned.
(3)If the defendant in those proceedings intends to contest the statement contained in such a certificate, he or she shall give notice in writing of that intention to the prosecution within 21 days, or such longer period as the court may allow, after the date of receipt by him or her of a copy of the certificate from the prosecution. Chapter 2 Aptitude Test Aptitude test to be passed 49.
(1)Subject to paragraph
(2), a Member State auditor or third-country auditor applying for approval as a statutory auditor in the State is required to sit and pass an aptitude test to demonstrate his or her knowledge of the enactments and practice that are relevant to statutory audits in the State.
(2)Paragraph
(1)shall not apply to a Member State auditor or third-country auditor if the recognised accountancy body is satisfied that he or she has otherwise demonstrated sufficient knowledge of the enactments and practice referred to in that paragraph.
(3)The Supervisory Authority shall, at such time as it thinks it appropriate to do so, issue guidelines to each recognised accountancy body as to the specific matters that a recognised accountancy body should have regard to in reaching a decision that it is satisfied that a person has demonstrated, in accordance with paragraph
(2), the knowledge referred to in paragraph
(1).
(4)A recognised accountancy body may charge and impose a fee (of an amount specified from time to time by the Minister sufficient to cover the body’s administrative expenses in respect of the following) on a Member State auditor or third-country auditor in respect of the administration of an aptitude test under this Regulation in relation to him or her.
(5)A fee imposed under paragraph
(4)may, in default of payment, be recovered from the Member State auditor or third-country auditor concerned as a simple contract debt in any court of competent jurisdiction. Scope of aptitude test 50.
(1)The aptitude test shall— (
  1. a)be conducted in either Irish or English, and (
  2. b)cover only the applicant’s adequate knowledge of the enactments and practice that are relevant to statutory audits in the State.
(2)The various matters that shall constitute the contents of the aptitude test shall be decided by the recognised accountancy body after it has received the approval of the Supervisory Authority to the contents of the test.
(3)A recognised accountancy body shall not alter the contents of an aptitude test approved under paragraph
(2)unless the alteration concerned has been approved by the Supervisory Authority. Adequate standards to be applied in administration of aptitude test 51.
(1)Subject to paragraph
(2), a recognised accountancy body shall apply adequate standards in the administration of the aptitude test.
(2)No standards shall be used by a recognised accountancy body for the purposes of paragraph
(1)unless those standards have (with respect to that use) first been approved by the Supervisory Authority. Chapter 3 Withdrawal of approval Grounds for mandatory withdrawal of approval in case of statutory auditor 52.
(1)The procedures under this Regulation are in addition to those procedures, in the cases to which Regulation 35
(9)to
(11)apply, that are required by Regulation 35
(9)to
(11)to be employed.
(2)For the purposes of this Regulation, the cases that can constitute circumstances of an auditor’s good repute being seriously compromised include cases of professional misconduct or want of professional skill on the part of the auditor.
(3)Without prejudice to Regulation 114 and subject to paragraphs
(5)to
(7), a recognised accountancy body shall withdraw an approval of an auditor under these Regulations if, but only if— (
  1. a)circumstances arise (involving acts or omissions on the part of the auditor) from which the recognised accountancy body can reasonably conclude that the auditor’s good repute is seriously compromised, or (
  2. b)the auditor no longer falls within paragraph (a), (
  3. b)or (
  4. c)of Regulation 43, or (
  5. c)in the case of a person who is a statutory auditor referred to in Regulation 44
(1)— (
  1. i)the auditor no longer falls within paragraph (
  2. a)of Regulation 43, (
  3. ii)the auditor is not registered as a statutory auditor in the public register, or (iii) the auditor is not subject to the regulation of a recognised accountancy body.
(4)Unless there do not exist internal appeal procedures of the recognised accountancy body as referred to in paragraph
(9)(a), references in paragraphs
(5)to
(8)to a recognised accountancy body shall be read as references to a recognised accountancy body acting through the disciplinary committee that deals with matters at first instance.
(5)Subject to paragraph
(8), paragraph
(6)applies where, having— (
  1. a)complied with the requirements of procedural fairness in that regard, and (
  2. b)served any notices required for that purpose or as required by its investigation and disciplinary procedures, the recognised accountancy body is satisfied that subparagraph (a), (
  3. b)or (
  4. c)of paragraph
(3)applies in the case of an auditor.
(6)Subject to paragraph
(8), the recognised accountancy body shall serve a notice in writing on the auditor stating that— (
  1. a)it is satisfied that subparagraph (a), (
  2. b)or (
  3. c)of paragraph
(3)applies in the case of the auditor, (
  1. b)the auditor must take specified steps to cause subparagraph (a), (
  2. b)or (
  3. c)of paragraph
(3)to cease to apply to him or her within a specified period (which shall be not less than one month), and (c) if those steps are not taken, it shall withdraw the approval of the auditor.
(7)Where the recognised accountancy body has served a notice under paragraph
(6)on a statutory auditor and the auditor has not, before the expiration of the specified period referred to in paragraph
(6)(b), taken the steps referred to in paragraph
(6)(b), the recognised accountancy body shall withdraw the approval of the auditor under these Regulations.
(8)The procedure specified in paragraph
(6)need not be employed if the acts or omissions concerned referred to in subparagraph (a) of paragraph
(3)are such as, in the opinion of the recognised accountancy body, constitute professional misconduct or want of professional skill on the part of the auditor of a degree that employing that procedure would not be in the public interest but nothing in this paragraph affects the application of the requirements of procedural fairness to the withdrawal of approval.
(9)If— (
  1. a)there exist applicable internal appeal procedures of the recognised accountancy body, and (
  2. b)the investigation and disciplinary procedures of the recognised accountancy body provide that a decision of its disciplinary committee, being a decision of a nature to which this Regulation applies, shall stand suspended or shall not take effect until, as the case may be— (
  3. i)the period for making an appeal under those procedures has expired without such an appeal having been made, (
  4. ii)such an appeal has been made and the decision to withdraw the approval confirmed, or (iii) such an appeal that has been made is withdrawn, then, notwithstanding anything in the preceding provisions of this Regulation, the operation of the withdrawal of approval by that disciplinary committee shall stand suspended until the happening of an event specified in subparagraph (b)(i), (
  5. ii)or (iii).
(10)Paragraph
(11)applies if— (
  1. a)there exist applicable internal appeal procedures of the recognised accountancy body, and (
  2. b)the investigation and disciplinary procedures of the recognised accountancy body do not provide, as referred to in paragraph
(9)(b), for the decision of the disciplinary committee referred to in that provision to stand suspended or not to take effect.
(11)Notwithstanding the internal appeal procedures referred to in paragraph
(10)(a), the auditor to whom the decision referred to in paragraph
(9)(b) relates may apply to the High Court for an order suspending the operation of the withdrawal pending the determination by the relevant appellate committee of an appeal that he or she is making under those procedures and, where such an application is made, paragraphs
(14)to
(17)apply to that application with— (
  1. a)the substitution of references to an appeal under those internal appeal procedures for reference to an appeal under Regulation 54, and (
  2. b)any other necessary modifications.
(12)If the relevant appellate committee referred to in paragraph
(11)is of the opinion, having regard to the particular issues that have arisen on that appeal, that, in the interests of justice, the disposal by it of an appeal referred to in that paragraph ought to include its proceeding in the manner specified in paragraphs
(6)and
(7), then, in disposing of that appeal, it shall proceed in the manner so specified.
(13)The recognised accountancy body shall take all reasonable steps to ensure that any appeal to the relevant appellate committee referred to in paragraph
(11)is prosecuted promptly and it shall be the duty of that appellate committee to ensure that any such appeal to it is disposed of as expeditiously as may be and, for that purpose, to take all such steps as are open to it to ensure that, in so far as is practicable, there are no avoidable delays at any stage in the determination of such an appeal.
(14)Where a recognised accountancy body has made a decision to withdraw the approval of an auditor under this Regulation (that is to say, a final decision of the recognised accountancy body on the matter after the internal appeal procedures (if any) of it have been employed and exhausted), the auditor may apply to the High Court for an order suspending the operation of the withdrawal pending the determination by the High Court of an appeal under Regulation 54 that he or she is making against the withdrawal.
(15)Subject to paragraph
(17), on the hearing of an application under paragraph
(14), the High Court may, as it considers appropriate and having heard the recognised accountancy body concerned and, if it wishes to be so heard, the Supervisory Authority (which shall have standing to appear and be heard on the application)— (
  1. a)grant an order suspending the operation of the withdrawal, or (
  2. b)refuse to grant such an order, and an order under subparagraph (
  3. a)may provide that the order shall not have effect unless one or more conditions specified in the order are complied with (and such conditions may include conditions requiring the auditor not to carry out statutory audits save under the supervision of another statutory auditor or not to carry out such audits save in specified circumstances).
(16)Subject to paragraph
(17), the High Court may, on application to it by the auditor or recognised accountancy body concerned, vary or discharge an order under paragraph
(15)(a) if it considers it just to do so.
(17)In considering an application under paragraph
(14)or
(16), the High Court shall have regard to— (
  1. a)whether, as regards the appeal the applicant is making under Regulation 54 to the High Court, the applicant has a strong case that is likely to succeed before that Court (and, for that purpose, the High Court shall require the applicant to give an indication of the facts that will be relied upon, or of the evidence that will be adduced in the case of facts that are in controversy, by him or her on the hearing of that appeal), and (
  2. b)the public interest and, in particular, the public interest in ensuring that there is the minimum of disruption, consistent with law, to the discharge by the recognised accountancy body concerned, as a body assigned with the function of granting and withdrawing approval. Grounds for mandatory withdrawal in case of statutory audit firm 53.
(1)The procedures under this Regulation are in addition to those procedures, in the cases to which Regulation 35
(9)to
(11)apply, that are required by Regulation 35
(9)to
(11)to be employed.
(2)For the purposes of this Regulation, the cases that can constitute circumstances of an audit firm’s good repute being seriously compromised include cases of professional misconduct or want of professional skill on the part of the audit firm or any of the one or more auditors through whom it acts.
(3)Without prejudice to Regulation 114 and subject to paragraphs
(5)to
(7), a recognised accountancy body shall withdraw an approval of an audit firm under these Regulations if, but only if— (
  1. a)circumstances arise (involving acts or omissions on the part of the audit firm or auditor or auditors through whom it acts) from which the recognised accountancy body can reasonably conclude that the firm’s good repute is seriously compromised, (
  2. b)the audit firm (not being a firm referred to in subparagraph (c)) no longer falls within subparagraphs (a), (
  3. b)and (
  4. c)of Regulation 46
(2), or (c) in the case of a firm which is a statutory audit firm referred to in Regulation 44
(2), the firm no longer falls within subparagraph (a) of Regulation 46
(2).
(4)Unless there do not exist internal appeal procedures of the recognised accountancy body as referred to in paragraph
(9)(a), references in paragraphs
(5)to
(8)to a recognised accountancy body shall be read as references to a recognised accountancy body acting through the disciplinary committee that deals with matters at first instance.
(5)Subject to paragraph
(8), paragraph
(6)applies where, having— (
  1. a)complied with the requirements of procedural fairness in that regard, and (
  2. b)served any notices required for that purpose or as required by its investigation and disciplinary procedures, the recognised accountancy body is satisfied that subparagraph (a), (
  3. b)or (
  4. c)of paragraph
(3)applies in the case of an audit firm.
(6)Subject to paragraph
(8), the recognised accountancy body shall serve a notice in writing on the audit firm stating that— (a) it is satisfied that subparagraph (a), (b) or (c) of paragraph
(3)applies in the case of the audit firm, (
  1. b)the audit firm must take specified steps to cause subparagraph (a), (
  2. b)or (
  3. c)of paragraph
(3)to cease to apply to it within a specified period (which shall not be less than one month), and (c) if those steps are not taken, it shall withdraw the approval of the firm.
(7)Where the recognised accountancy body has served a notice under paragraph
(6)on a statutory audit firm and the firm has not, before the expiration of the specified period referred to in paragraph
(6)(b), taken the steps referred to in paragraph
(6)(b), the recognised accountancy body shall withdraw the approval of the audit firm under these Regulations.
(8)The procedure specified in paragraph
(6)need not be employed if the acts or omissions concerned referred to in subparagraph (a) of paragraph
(3)are such as, in the opinion of the recognised accountancy body, constitute professional misconduct or want of professional skill on the part of the audit firm (or the auditor or auditors through whom it acts) of a degree that employing that procedure would not be in the public interest but nothing in this paragraph affects the application of the requirements of procedural fairness to the withdrawal of approval.
(9)If— (
  1. a)there exist applicable internal appeal procedures of the recognised accountancy body, and (
  2. b)the investigation and disciplinary procedures of the recognised accountancy body provide that a decision of its disciplinary committee, being a decision of a nature to which this Regulation applies, shall stand suspended or shall not take effect until, as the case may be— (
  3. i)the period for making an appeal under those procedures has expired without such an appeal having been made, (
  4. ii)such an appeal has been made and the decision to withdraw the approval confirmed, or (iii) such an appeal that has been made is withdrawn, then, notwithstanding anything in the preceding provisions of this Regulation, the operation of the withdrawal of approval by that disciplinary committee shall stand suspended until the happening of an event specified in subparagraph (b)(i), (
  5. ii)or (iii).
(10)Paragraph
(11)applies if— (
  1. a)there exist applicable internal appeal procedures of the recognised accountancy body, and (
  2. b)the investigation and disciplinary procedures of the recognised accountancy body do not provide, as referred to in paragraph
(9)(b), for the decision of the disciplinary committee referred to in that provision to stand suspended or not to take effect.
(11)Notwithstanding the internal appeal procedures referred to in paragraph
(10)(a), the audit firm to which the decision referred to in paragraph
(9)(b) relates may apply to the High Court for an order suspending the operation of the withdrawal pending the determination by the relevant appellate committee of an appeal that it is making under those procedures and, where such an application is made, paragraphs
(14)to
(17)apply to that application with— (
  1. a)the substitution of references to an appeal under those internal appeal procedures for reference to an appeal under Regulation 54, and (
  2. b)any other necessary modifications.
(12)If the relevant appellate committee referred to in paragraph
(11)is of the opinion, having regard to the particular issues that have arisen on that appeal, that, in the interests of justice, the disposal by it of an appeal referred to in that paragraph ought to include its proceeding in the manner specified in paragraphs
(6)and
(7), then, in disposing of that appeal, it shall proceed in the manner so specified.
(13)The recognised accountancy body shall take all reasonable steps to ensure that any appeal to the relevant appellate committee referred to in paragraph
(11)is prosecuted promptly and it shall be the duty of that appellate committee to ensure that any such appeal to it is disposed of as expeditiously as may be and, for that purpose, to take all such steps as are open to it to ensure that, in so far as is practicable, there are no avoidable delays at any stage in the determination of such an appeal.
(14)Where a recognised accountancy body has made a decision to withdraw the approval of an audit firm under this Regulation (that is to say, a final decision of the recognised accountancy body on the matter after the internal appeal procedures (if any) of it have been employed and exhausted), the audit firm may apply to the High Court for an order suspending the operation of the withdrawal pending the determination by the High Court of an appeal under Regulation 54 that it is making against the withdrawal.
(15)Subject to paragraph
(17), on the hearing of an application under paragraph
(14), the High Court may, as it considers appropriate and having heard the recognised accountancy body concerned and, if it wishes to be so heard, the Supervisory Authority (which shall have standing to appear and be heard on the application)— (
  1. a)grant an order suspending the operation of the withdrawal; or (
  2. b)refuse to grant such an order, and an order under subparagraph (
  3. a)may provide that the order shall not have effect unless one or more conditions specified in the order are complied with (and such conditions may include conditions requiring the audit firm not to carry out statutory audits save under the supervision of one or more statutory auditors or one or more statutory audit firms or not to carry out such audits save in specified circumstances).
(16)Subject to paragraph
(17), the High Court may, on application to it by the audit firm or recognised accountancy body concerned, vary or discharge an order under paragraph
(15)(a) if it considers it just to do so.
(17)In considering an application under paragraph
(14)or
(16), the High Court shall have regard to— (
  1. a)whether, as regards the appeal the applicant is making under Regulation 54 to the High Court, the applicant has a strong case that is likely to succeed before that Court (and, for that purpose, the High Court shall require the applicant to give an indication of the facts that will be relied upon, or of the evidence that will be adduced in the case of facts that are in controversy, by it on the hearing of that appeal), and (
  2. b)the public interest and, in particular, the public interest in ensuring that there is the minimum of disruption, consistent with law, to the discharge by the recognised accountancy body concerned, as a body assigned with the function of granting and withdrawing approval. Appeals against withdrawal of approval 54.
(1)Subject to paragraph
(2), a person may appeal to the High Court against the withdrawal by a recognised accountancy body of approval under these Regulations of the person as a statutory auditor or audit firm.
(2)An appeal shall not lie under paragraph
(1)unless and until any applicable internal appeal procedures of the recognised accountancy body have been employed and exhausted by the person referred to in that paragraph.
(3)An appeal under paragraph
(1)shall be made within one month— (
  1. a)unless subparagraph (
  2. b)applies, after the date of the withdrawal of approval, or (
  3. b)after the confirmation of that withdrawal on foot of the internal appeal procedures of the recognised accountancy body having been employed.
(4)On the hearing of an appeal under paragraph
(1), the High Court— (
  1. a)if it is satisfied that the appellant has established that there was not a reasonable basis for the decision of the recognised accountancy body concerned to withdraw the approval, shall cancel the withdrawal of the approval, or (
  2. b)if it is not so satisfied, shall confirm the withdrawal of the approval.
(5)For the purposes of paragraph
(4), there is a reasonable basis for the decision of the recognised accountancy body if, taking into account the expertise and specialist knowledge possessed by the recognised accountancy body, the decision (and the process that led to its making) was not vitiated by— (a) any serious and significant error or a series of such errors, (b) a mistake of law, or (c) the evidence, taken as a whole, not supporting the decision.
(6)The High Court may, on the hearing of an appeal under paragraph
(1), consider evidence not adduced or hear an argument not made to the recognised accountancy body concerned if the Court is satisfied that— (
  1. a)there are cogent circumstances justifying the failure to adduce the evidence or make the argument to the recognised accountancy body, and (
  2. b)it is just and equitable for the Court to consider the evidence or hear the argument, as the case may be.
(7)A notification of the outcome of an appeal under this Regulation (or of any appeal from a decision of the High Court thereunder) shall be made by the recognised accountancy body concerned to the same persons to whom a notification of a withdrawal of approval must be made by Regulation 55 and (where it applies) Regulation
  1. Certain persons to be notified of withdrawal of approval
  2. Without prejudice to Regulation 56, where the approval under these Regulations of a statutory auditor or audit firm is withdrawn for any reason by a recognised accountancy body, that fact and the reasons for the withdrawal shall be communicated by the recognised accountancy body to— (a) the Supervisory Authority, and (b) the Registrar of Companies, as soon as possible, but not later than one month after the date of withdrawal of approval. Other persons to be notified of withdrawal of approval 56.
(1)Where the approval under these Regulations of a statutory auditor is withdrawn for any reason by a recognised accountancy body, the recognised accountancy body shall, in addition to making the communication specified in Regulation 55, notify the relevant competent authorities of the host Member States, where the statutory auditor is also approved and entered in the public registers of those States pursuant to Articles 15 to 19 of the Audit Directive, of the fact of the withdrawal and the reasons for it.
(2)Where the approval under these Regulations of an audit firm is withdrawn for any reason by the recognised accountancy body, the recognised accountancy body shall, in addition to making the communication specified in Regulation 55, notify the relevant competent authorities of the host Member States, where the statutory auditor is also registered and entered in the public registers of those States pursuant to Articles 15 to 19 of the Audit Directive, of the fact of the withdrawal and the reasons for it.
(3)If the approval under these Regulations of a statutory auditor or audit firm is withdrawn by the Supervisory Authority, this Regulation and Regulation 55 (other than paragraph (
  1. a)of
  2. it)shall apply in relation to the withdrawal as if the references in them to the recognised accountancy body were references to the Supervisory Authority and with any other necessary modifications.
(4)The notifications under this Regulation shall be made as soon as possible, but not later than one month after the date of withdrawal of approval. PART 5 STANDARDS AND PROVISIONS APPLICABLE TO STATUTORY AUDITORS AND AUDIT FIRMS Chapter 1 Appointment of Statutory Auditors or Audit Firms Prohibition of contractual clauses restricting choice of auditors 57.
(1)Subject to paragraph
(2), a contractual clause which has the effect of restricting the choice by the general meeting of shareholders or members of the audited entity pursuant to Part 6 of the Companies Act 2014 , or any audited entity to whom these Regulations apply, to certain categories or lists of statutory auditors or audit firms as regards the appointment of a particular statutory auditor or audit firm to carry out the statutory audit of that entity shall be prohibited and shall be void.
(2)(a) A contractual clause referred to in paragraph
(1)which— (i) does not fall within Article 16
(6)of Regulation (EU) No 537/2014, and (
  1. ii)exists on 17 June 2016, is void on and from that date. (
  2. b)Paragraph
(1)shall not apply to a contractual clause which falls within Article 16
(6)of Regulation (EU) No 537/2014 until 17 June 2017. (c) A contractual clause referred to in paragraph
(1)which— (i) falls within Article 16
(6)of Regulation (EU) No 537/2014, and (ii) exists on 17 June 2017, is void on and from that date.
(3)An audited entity that is a public-interest entity shall directly and without delay report to the Supervisory Authority any contractual clause referred to in paragraph
(1)that purports to affect it and the circumstances which gave rise to that clause.
(4)The Supervisory Authority, on receipt of a report under paragraph
(3), may, by virtue of its powers under Part 15 of the Companies Act 2014 , share the report with authorities in the State. Selection procedures for statutory auditors or audit firms by public-interest entities 58.
(1)Subject to paragraph
(2), the following selection procedures apply, for financial years commencing on or after 17 June 2016, to the appointment of a statutory auditor or audit firm to a public-interest entity: (a) the audit committee shall prepare a recommendation for the directors of the entity by carrying out the selection procedure specified in Article 16
(3)of Regulation (EU) No 537/2014; (
  1. b)the audit committee shall submit a recommendation to the directors of the entity for the appointment of statutory auditors or audit firms; (
  2. c)the recommendation— (
  3. i)shall be justified and contain at least 2 choices for the audit engagement and shall express a duly justified preference for one of them, and (
  4. ii)shall state (if such be the case) that the recommendation is free from influence by a third party and that, on and from 17 June 2017, no clause of the kind referred to in Regulation 57
(1)has been imposed upon it; (
  1. d)the proposal by the directors to the general meeting of shareholders or members of the entity for the appointment of statutory auditors or audit firms— (
  2. i)shall include the recommendation referred to in subparagraph (
  3. b)and the preference referred to in subparagraph (c)(i), (
  4. ii)if it departs from the preference of the audit committee, shall justify the reasons for not following the recommendation of the audit committee, and (iii) shall state if the statutory auditor or audit firm recommended by the directors participated in the selection procedure referred to in paragraph
(2)(a).
(2)Paragraph
(1)shall not apply if— (a) a selection procedure in accordance with Article 16
(3)of Regulation (EU) No 537/2014 has been carried out in respect of the appointment of the statutory auditor or audit firm in relation to one or more of the preceding 9 financial years, and (b) the statutory auditor or audit firm appointed by the public-interest entity was appointed for the previous financial year.
(3)Where the public-interest entity is exempt from the requirement for an audit committee under Regulation 115, this Regulation applies to the directors of the public-interest entity.
(4)Where a public-interest entity relies on the provisions of section 382, 384 or 385 of the Companies Act 2014 , the public-interest entity shall, as soon as is practicable, inform the Supervisory Authority of that fact.
(5)The appointment of an auditor is invalid if the appointment contravenes a provision of this Regulation.
(6)(a) Subject to subparagraph (b), a public-interest entity shall keep records demonstrating that the selection procedures referred to in paragraph
(1)have been carried out. (b) The public-interest entity shall keep those records for at least 6 years from the date on which the selection procedures were completed.
(7)A public-interest entity which contravenes paragraph
(6)(
  1. a)or (
  2. b)shall be guilty of an offence and shall be liable, on summary conviction, to a class A fine. Appointment of statutory auditors or audit firms by public-interest entities — informing the Supervisory Authority 59.
(1)Subject to paragraph
(2)— (
  1. a)where a statutory auditor or audit firm is first appointed by a public-interest entity on or after 17 June 2016, he, she or it shall inform the Supervisory Authority within one month after the date of such appointment that the statutory auditor or audit firm has been appointed to hold office, and (
  2. b)where a statutory auditor or audit firm which has complied with subparagraph (
  3. a)is subsequently appointed by the same or a different public-interest entity, he, she or it shall inform the Supervisory Authority within one month after the date of such appointment that the statutory auditor or audit firm has been appointed to hold office only if, immediately before the time of such appointment, the statutory auditor or audit firm held no such office with any public-interest entity.
(2)The information shall be submitted in such form and manner as the Supervisory Authority specifies and may be used by the Supervisory Authority in the performance of its functions.
(3)A statutory auditor or audit firm who or which contravenes paragraph
(1)shall be guilty of an offence and shall be liable— (
  1. a)on summary conviction, to a class A fine, or (
  2. b)on conviction on indictment, to a fine not exceeding €12,500. Removal of statutory auditors or audit firms by public-interest entities — supplementary provisions 60.
(1)In the case of a statutory audit of a public-interest entity— (
  1. a)shareholders representing 5% or more of the voting rights or of the share capital, or (
  2. b)the Supervisory Authority, may bring a claim before the court for the removal of the statutory auditor or audit firm subject to there being good and substantial grounds for bringing such a claim before the court.
(2)The grounds for bringing the claim before the court must relate to— (
  1. a)the conduct of the auditor or audit firm with regard to the performance of his, her or its duties as auditor of the public-interest entity or otherwise, or (
  2. b)the petitioner’s opinion that it is in the best interests of the public-interest entity to do so.
(3)For the purposes of paragraph
(2)— (
  1. a)diverging opinions on accounting treatments or audit procedures cannot constitute the basis for the passing of any resolution for the purposes of that paragraph, and (
  2. b)“bestinterests of the public-interest entity” does not include any illegal or improper motive with regard to avoiding disclosures or detection of any contravention by the entity of these Regulations. Directors’ report to include date of last appointment of statutory auditor or audit firm 61.
(1)The directors’ report shall contain details of the date of appointment of the public-interest entity’s statutory auditor or audit firm.
(2)Where a public-interest entity has sought an extension from the Supervisory Authority under Regulation 105, pursuant to Article 17
(6)of Regulation (EU) No 537/2014, the directors’ report shall also contain details of the extension granted.
(3)In this Regulation, “directors’ report” means the directors’ report required by section 325 of the Companies Act 2014 . Chapter 2 Standards for Statutory Auditors Continuing education 62.
(1)A recognised accountancy body shall attach the condition specified in paragraph
(2)to an approval granted by it under these Regulations to a person as statutory auditor.
(2)The condition is one requiring the person to take part in appropriate programmes of continuing education in order to maintain his or her theoretical knowledge, professional skills and values, including, in particular, in relation to auditing, at a sufficiently high level.
(3)In the case of a statutory auditor who is a person in relation to whom a recognised accountancy body may, by virtue of Regulation 35, perform functions under these Regulations

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