Development of policy, preparation and drafting of legislation in relation to company law (auditing); the negotiation of EU proposals on this area of company law and the transposition of EU proposals into domestic law.
The Companies (Statutory Audits) Act 2018, No. 22 of 2018, sets out the current policy in relation to auditors/audit firms carrying out statutory audits. It gives the Irish Auditing and Accounting Supervisory Authority (IAASA), as the competent authority with ultimate responsibility for oversight, the appropriate powers to ensure effective monitoring and enforcement of the new requirements.
The transposition deadline for the Audit Directive 2014/56/EC was 17 June 2016 and, as the Audit Regulation (EU) No 537/2014 was directly applicable in Ireland from the same date, the necessary requirements of the EU audit measures were transposed in June 2016 by way of a statutory instrument – European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EC, and Regulation (EU) No 537/2014) Regulations 2016 – SI No 312 of 2016.
The Directive contains amendments to augment the provisions of the Statutory Audit Directive. The Regulation is directed at Public-Interest Entities (PIEs), entities which are of significant public interest because of their business, their size, their number of employees or their corporate status is such that they have a wide range of stakeholders. The category of PIE also encompasses systemically important entities such as listed companies, credit institutions and insurance undertakings.
The Act avails of options not available in secondary legislation which will enhance the system of oversight of audit in Ireland and audit quality. It elevates the provisions of SI No 312 of 2016 into primary legislation to provide a single, comprehensive framework for statutory audit in the Companies Act 2014.
In addition, the Act updates the rules relating to auditors for Industrial and Provident Societies Acts and the Friendly Societies Acts.
The Act was signed into law by the President on 25 July 2018. The Companies (Statutory Audits) Act 2018 (Commencement) Order 2018, SI No 366 of 2018 commences the Act as and from 21 September 2018 for all sections, except for sections 3(1)(a), 3(1)(h), 3(1)(i), 3(1)(j) and 9.
Third Country Auditors/Audit Entities
The EU Commission issue Commission Decisions which relate to the equivalence of certain third country public oversight, quality assurance, investigation and penalty systems for auditors and audit entities and a transitional period for audit activities of certain third country auditors and audit entities in the European Union, as provided for in Article 46 of the EU Audit Directive 2006/43/EC (as amended by Directive 2014/56/EU).
The European Union (Third-Country Auditors and Third-Country Audit Entities Equivalence, Transitional Period and Fees) Regulations 2018, SI No 367 of 2018 consolidate three existing statutory instruments (SI No 312 of 2012, SI No 555 of 2014 and SI No 67 of 2017) which transpose Commission Decisions and Commission Implementing Decisions.
The following Regulations are revoked:
(a) the European Union (Third Country Auditors and Audit Entities Equivalence, Transitional Period Measures and Fees) Regulations 2012 (SI No 312 of 2012);
(b) the European Union (Third Country Auditors and Audit Entities Equivalence, Transitional Period and Fees) (Amendment) Regulations 2014 (SI No 555 of 2014);
(c) the European Union (Third Country Auditors and Audit Entities Equivalence, Transitional Period and Fees) (Amendment) Regulations 2017 (SI No 67 of 2017).
The Irish Auditing and Accounting Supervisory Authority (IAASA) is the competent authority in Ireland for the purposes of these Commission Decisions, Commission Implementing Decisions and these Regulations.
The EU Commission issue Commission Decisions relating to the adequacy of competent authorities of certain third countries and territories regarding the transfer of relevant audit papers as provided for in Article 47 of the EU Audit Directive 2006/43/EC.
The European Union (Adequacy of Competent Authorities of certain Third Countries regarding transfer of relevant audit papers) Regulations 2017, SI No 68 of 2017, give effect to Commission Decision 2010/64/EU of 5 February 2010, Commission Implementing Decision (EU) 2016/1010 of 21 June 2016 and Commission Implementing Decision (EU) 2016/1156 of 14 July 2016 on the adequacy of competent authorities of certain third countries and territories regarding transfer of relevant audit papers.
It provides that the competent authorities of third countries listed below shall be considered adequate.
(i) Under Commission Decision 2010/64/EU–
the Canadian Public Accountability Board;
the Financial Services Agency of Japan;
the Certified Public Accountants and Auditing Oversight Board of Japan;
the Federal Audit Oversight Authority of Switzerland.
(ii) Under Commission Implementing Decision (EU) 2016/1010–
the Comissao de Valores Mobiliarios of Brazil;
the Dubai Financial Service Authority of Dubai International Financial Centre;
the Registrar of Companies of Guernsey;
the Finance Professions Supervisory Centre of Indonesia;
the Financial Supervision Commission of the Isle of Man;
the Jersey Financial Services Commission;
the Audit Oversight Board of Malaysia;
the Independent Regulatory Board for Auditors of South Africa;
the Financial Services Commission of South Korea and the Financial
Supervisory Service of South Korea;
the Financial Supervisory Commission of Taiwan;
the Securities and Exchange Commission of Thailand.
These Regulations apply to the Finance Professions Supervisory Centre of Indonesia and the Independent Regulatory Board for Auditors of South Africa until 31 July 2019.
(iii) Under Commission Implementing Decision (EU) 2016/1156–
the Public Company Accounting Oversight Board of the USA;
the Securities and Exchange Commission of the USA.
These Regulations apply to (iii) above from 1 August 2016 to 31 July 2022.
The Irish Auditing and Accounting Supervisory Authority (IAASA) is the competent authority in Ireland for the purposes of these Commission Implementing Decisions and these Regulations.