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IAASA sanctions Michael Tuohy in relation to audit of National Asset Management DAC

24/11/2021

Following an audit quality inspection undertaken by IAASA and an investigation under section 934 of the Companies Act 2014, the Authority has imposed sanctions on Mr Michael Tuohy, statutory auditor and audit partner in Mazars, in relation to the statutory audit of National Asset Management DAC (‘NAM’), for the year ended 31 December 2016.

Under the settlement agreement, the Authority has reprimanded Mr Tuohy and fined him €10,500. This incorporates a 30% discount for early settlement.

In 2016, NAM revenue earned was €371m, with a profit of €7m and assets of €7.4bn, including €3.9bn of loans and receivables.

The issues that arose concerned the following:

a)     There was insufficient challenging of assumptions used in the valuation of the loans and receivables balance. There was insufficient work on reasonableness of management assumptions. Appropriate procedures were not performed in relation to the scoping, review and consideration of the work of the valuation expert utilised by the audit team;

b)     There was insufficient appropriate audit evidence over the completeness and accuracy of the data underlying the loans and receivables balance because of insufficient IT testing performed and failure to sufficiently consider the impact of multiple IT deficiencies and multiple audit adjustments on the planned procedures;

c)     The audit team did not perform sufficient procedures to test the existence of loans/underlying securities.

Further details are set out in the Public Notice available here.

Commenting on the settlement, IAASA Chief Executive Kevin Prendergast said:

“The Authority’s settlement agreement process continues to form a strong basis for the efficient and effective addressing of audit deficiencies uncovered through its inspection regime. In this case the sanction imposed is a proportionate response to the wrongdoing identified, and also recognises the level of cooperation provided by the respondent throughout the investigation.

IAASA continues to support high quality audit through its direct inspections regime, its work with the Recognised Accountancy Bodies in their regulation of their members, and where appropriate through a robust and impartial enforcement process.”

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