IAASA’s Enforcement Unit conducts enquiries and investigations under sections 933 and 934 of the Companies Act. Section 933 allows IAASA to assess compliance with the investigation and disciplinary process of a Prescribed Accountancy Body (PAB). Section 934 gives IAASA the power to directly investigate the conduct of members or member firms of those PABs.

Section 933 Enquiries

Under section 905(2)(d) of the Act, IAASA can conduct enquiries to check if a PAB has followed its approved investigation and disciplinary procedures and impose sanctions if necessary. Section 905(2)(ea) allows IAASA to enquire if a Recognised Accountancy Body (RAB) has met its statutory obligations under Parts 27 and 28 of the Act and impose sanctions if needed.

Section 934 Investigations

Section 905(2)(f) of the Act enables IAASA to investigate possible breaches of PAB standards by a member. Section 905(2)(fa) allows IAASA to investigate possible violations of sections 336, 337, Parts 27 and 28 of the Companies Act, or the EU Audit Regulation by a statutory auditor related to public interest entities. IAASA can also impose sanctions for these investigations.

Initiation of Enquiry or Investigation

Not all matters referred to the Enforcement Unit lead to an enquiry or investigation. IAASA can decide whether to start a preliminary enquiry or investigation. IAASA’s role is not a mechanism to appeal the decision of a PAB.

If a preliminary enquiry is initiated, IAASA must determine if there is a prima facie case that a PAB has not complied with its approved procedures, or a RAB has not complied with the applicable provisions in performing a Part 27 or 28 function. If warranted, the matter is referred to an Enquiry Committee for a full enquiry.

If a preliminary investigation is initiated, IAASA must determine if there is a prima facie case that a “specified person” has committed a relevant contravention and if a full investigation is appropriate or in the public interest.

Full Enquiry or Investigation

If referred to a Full Enquiry/Investigation Committee, IAASA will appoint a committee of at least three individuals, with the majority not being members of a PAB. The committee may conduct a public oral hearing but can exclude the public if necessary. The committee’s findings are based on the balance of probabilities, and it has the power to impose sanctions and costs.

Settlement Procedures

IAASA may negotiate settlements on a without prejudice basis to resolve matters early. This process is efficient and provides timely resolution and transparency through the publication of case details. Settlements avoid the additional costs and administrative burden of extended investigations.

Enforcement decisions

In accordance with its publications policy the Authority publishes details of its enforcement decisions.

Policies and procedures

The Authority has issued a set of policies and procedures relating to enforcement.