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Companies (Statutory Audits) Bill 2017

Companies (Statutory Audits) Bill 2017 The Companies (Statutory Audits) Bill 2017 was published on 6 November 2017. Once enacted, it will give effect to certain optional provisions of the EU Audit Directive and the EU Audit Regulation. The mandatory provisions and some optional provisions of this EU Audit Directive and EU Audit Regulation were given effect to by the Statutory Audits Regulations (SI 312 of 2016) (the ’Regulations’) in July 2016.

Once enacted, this Bill will revoke and restate the Regulations in the Companies Act 2014 thus providing a consolidated legal framework for statutory audits. Some of the proposed optional provisions are set out below and would:

  • mean that in addition to those entities currently defined as ’public-interest entities’ in the Regulations, the definition would extend to undertakings otherwise designated as such by any other enactment; 
  • extend the range of public-interest entities, exempt from establishing audit committees, to include those satisfying certain criteria in the Prospectus Directive, provided the functions of an audit committee are performed by the board as a whole; 
  • exclude certain types of captive insurance undertakings and captive re-insurance undertakings from the requirement to have an audit committee provided that they have a body performing equivalent functions of an audit committee; 
  • allow the Irish Auditing and Accounting Supervisory Authority (’IAASA’), as Supervisory Authority, to set down further requirements for the content of the additional report by the statutory auditor to be submitted to the audit committee or directors (where the public-interest entity is exempt from the requirement to have an audit committee); 
  • permit IASSA to lay down additional requirements in relation to the content of the audit report; 
  • mean that IASSA would have increased supervisory powers, powers of sanction and powers of delegation. 

Proposed amendments to the Companies Act 2014 include a new Part 27 Statutory Audits and Schedules 19 and 20 which will restate provisions of the Regulations and include provisions governing matters from approval to withdrawal of statutory auditors and audit firms to the public register to be maintained by the Registrar of Companies. The Bill also proposes to repeal certain provisions in the Industrial and Provident Societies Act and the Friendly Societies Act to reflect, for example, auditor eligibility criteria and to provide for certain offences and fines.