Issuer constituency
At 30 June 2024, IAASA’s financial reporting examination constituency, as notified by the Central Bank of Ireland, comprised 83 issuers made up of:
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19 Equity issuers;
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5 Closed-ended funds; and
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59 Debt issuers
The Companies Act 2014 requires third-country auditors/audit entities to notify IAASA no later than one month after the event of any change to the information contained in the public register relating to them.
Applications for updates to or changes in information on the public register should be submitted to IAASA using update Form B-U(IE) along with the relevant annexes. Update form can be found here
Please ensure that the form and related annexes are fully completed within one month and signed as required and that all supporting documentation is included.
The EU can issue Commission Decisions where, for a transitional period, certain third-country auditors and audit entities are exempt for a transitional period from meeting all the requirements of ‘full’ registration (the article 45 of Audit Directive registrations) and can apply for transitional registration instead. This is relevant only for third-country auditors/audit entities whose home jurisdiction has been listed by a Commission Decision as being eligible. If you believe you or your firm are eligible for transitional registration and intend to issue an audit report for a relevant audit client then please contact IAASA at thirdcountry@iaasa.ie
The public register is maintained by the Companies Registration Office and is available here. When IAASA approves a registration, updates a registration or amends the information in relation to an existing registration, we submit the register to the Companies Registration Office.
A network is defined in Article 2(7) of the EU audit Directive (Directive 2006/43/EU as amended) as the larger structure:
- Which is aimed at cooperation and to which a statutory auditor or an audit firm belongs, and
- Which is clearly aimed at profit or cost sharing or shares common ownership, control or management, common quality control policies and procedures, a common business strategy, the use of a common brand name or a significant part of professional resources.
Third-country auditors and third-country audit entities must register with IAASA in advance of providing an audit report concerning the accounts of a relevant audit client. Where an audit report is provided by a non-registered third-country auditor/audit entity (who is required to be registered in Ireland) that audit report has no legal effect in Ireland.
A relevant audit client is an audit client of the third-country audit firm. It is a company incorporated outside the EU/EEA and which has transferrable securities admitted to trading on a regulated market in Ireland. The issuers within article 2(1) of Directive 2004/109/EC are included except the following which the law specifically excludes:
The company issuing exclusively debt securities within the meaning of article 2(1)(c) of Directive 2004/109/EC and these debt securities were admitted to trading in Ireland on or after 31 December 2010 and have a denomination per unit of at least €100,000 (or equivalent to this value at date of issue if a different currency), or
The company issues exclusively debt securities within the meaning of article 2(1)(c) of Directive 2004/109/EC and these debt securities were admitted to trading in Ireland before 31 December 2010 and have a denomination per unit of at least €50,000 (or equivalent to this value at date of issue if a different currency), or
The company issues exclusively units issued by collective investment undertakings that are not closed-end types, or units acquired or deposited of in such collective investment undertakings within the meaning of Article 1 (2) of Directive 2004/109/EC
If a third-country audit entity is uncertain whether its client is a relevant audit client it may need to consider seeking legal advice. IAASA cannot provide such advice.
Third-country audit entities that intend to provide an audit report concerning the accounts or consolidated accounts of a relevant audit client are required to register as third-country audit entities in Ireland. Each third-country auditor responsible for audits of the firm’s relevant audit clients is also required to apply to be included on the public register of third-country auditors.
The initial registration form (Form B(IE) and Form B-1-6 (IE) Annexes ) includes a list of information requirements for all applicants. The forms are located here.
The annual renewal form (AR Form B (IE) and annexes) includes a list of the information required at annual renewal time. The annual renewal forms are located here.
The update to registrations form (Form B-U (IE) and Form B-U-1-6 Annexes) includes a list of the information required for updates to the information on the public register. The forms are located here.
Question 6 on the application form (Form B (IE)) and question 6 on the update form (Form B-U (IE)) includes details of the requirements for each member of the administrative or management body of the firm. It also requires confirmation that the majority of this body hold a qualification that meets the requirements of the EU directive.
Question 12 on the application form and question 9 on the update form includes additional requirements relating to the good repute of the members of this body. This includes a declaration by the firm that all the members of the body are of good repute. It also includes requirements regarding letters of good standing from the accountancy body where the individual is a member and its home regulator as well as a declaration (on Form B-8(IE)) from the member themselves regarding their good repute.
Annex Form B-4(IE) is also required to be completed and submitted (Annex Form B-U-4(IE) for updates).
Question 7 on the application form (Form B) and question 7 on the update form Form B-U includes details of the requirements for each new third-country auditor seeking registration in Ireland.
Question 12 on the application form and question 9 on the update form includes additional requirements relating to the good repute of the firm’s third-country auditors seeking registration in Ireland. This includes a declaration by the firm that all the third-country auditors to be registered are of good repute. It also includes requirements regarding letters of good standing from the accountancy body where the individual is a member and its home regulator as well as a declaration (on Form B-8(IE)) from the auditor themselves regarding their good repute.
Annex Form B-5(IE) and annex Form B-6(IE) are also required to be completed and submitted by the firm ( Annex Form B-U-5 (IE) and Annex Form B-U-6 for updates)
IAASA will accept the use of independence requirements in accordance with the IFAC Code of Ethics or with the Ethical Standard for Auditors (Ireland). Where these are not used, we will consider the basis of acceptability of the requirements otherwise applied by the third-country audit entity. Acceptance of those requirements is without prejudice to any decision by the EU regarding independence requirements used by third-country auditors and audit entities.
IAASA will accept the use of International Standards on Auditing (ISAs) or the International Standards on Auditing (Ireland). Where these are not used, we will consider the basis of acceptability of the standards otherwise applied by the third-country audit entity. The EU can make a decision to adopt the ISAs or a decision regarding the equivalence of third-country auditing standards. IAASA’s acceptance of standards is without prejudice to any decision by the EU third-country.
Yes. The total fee is €4,500 payable annually. This consists of the annual registration assessment fee of €4,000 plus the annual registration fee of €500. Details of these fees and of how to make payment to IAASA are included on the registration form Form B and on the annual renewal of registration form AR Form B.
For any additional questions about third-country audit registration in Ireland please email IAASA at thirdcountry@iaasa.ie
Once approved a third-country auditor’s/audit entity’s registration is valid for 12 months from the date of IAASA’s approval of the registration. To continue its registration in Ireland after the 12 month period the auditor/audit entity must submit an annual renewal of registration application along with all the required documentation and fees. These must be submitted to IAASA in advance of the renewal date to ensure that the audit entity/auditor remains on the public register of third-country auditors in Ireland.
If a third-country auditor/audit entity ceases to be responsible for any audits of relevant audit clients they should notify IAASA to be removed from the public register of third-country auditors in Ireland.
Applications for renewal of registration as a third-country auditor/audit entity in Ireland should be submitted to IAASA. Application forms can be found here
Please ensure that the forms are fully completed and signed as required, all supporting documentation is included and the relevant fees are paid. Failure to provide all required information and documentation and the relevant fee by the renewal date can result in the third-country audit entity and its third-country auditors registration being removed.
The annual renewal forms and process deal only with the renewal of the information previously provided to IAASA for registration purposes. If a third-country auditor/audit entity is seeking to change or update any of the information on the public register then additional information and documentation is required (see our FAQ dealing with changes to the information contained in the public register)
Applications for initial registration as a third-country auditor/audit entity in Ireland should be submitted to IAASA. Application forms can be found here. All forms must be fully completed and signed as required, all supporting documentation is included and the relevant fees are paid before a third country auditor/audit entity will be put on the register.
No. Statutory audits in Ireland can only be carried out by statutory auditors/audit firms approved in Ireland. These parties are approved and registered in Ireland by Recognised Accountancy Bodies. Registration as a third-country auditors/audit entities in Ireland is approved by IAASA and permits the registered party to provide audit reports for relevant third-country audit clients only.
No. The registration process, described in these FAQs, is restricted to third country auditors/audit entities who are subject to systems of public oversight, quality assurance, and investigations and penalties equivalent to those in the EU legislation. The EU Commission, following assessments (as referred to in article 46 of the EU Audit Directive) of the applicable systems has deemed a number of third countries and territories as having relevant systems equivalent to those set out in the EU Directive 2006/43/EC (as amended). A list of the countries and territories which have been deemed equivalent can be found here
In rare circumstances, in the absence of a decision by the EC, IAASA may make an assessment of equivalence.
Yes. There is currently no single registration for third-country auditors/audit entities across the EU. If the third-country auditor/audit entity intends to issue audit reports to a relevant audit client listed on an Irish regulated market then registration in Ireland is a requirement.
The legislation in Ireland (based on EU law) requires certain third-country auditors and audit firms to apply for registration in Ireland with IAASA.
The Companies Act 2014 (‘the Act’) transposed the EU statutory audit directive 2006/43/EC (as amended) and EU Regulation 537/2014 into Irish law. The Act includes the regulatory framework relating to third-country auditors and third-country audit entities inclusion on a public register and to be subject to certain levels of regulation.
In Ireland IAASA is the competent authority responsible for the registration of third-country auditors and audit entities that are required to seek this registration. The Companies Registration Office is responsible for the maintenance of the Register. The public register can be found here
Captives (as defined in Section 3, Art. 13 (2) of DIRECTIVE 2009/138/EC) fall under the definition of ‘insurance undertaking’, as detailed in Recital 10 of same directive, which brings them under the PIE definition.
If you are auditing a component that is not itself a legal entity, it is unlikely to be a PIE.
Article 2 of Directive 2013/36/EU where the definition of ‘credit institution’ (in respect of the current PIEs definition) originates from, specifically removes Irish credit unions as an entity type bound by the same Directive. This in turn is interpreted as exempting Irish Credit Unions from the PIEs (as defined in Directive 2014/56/EC) classification of b) ‘Credit Institution’.
Similar to other fund vehicles, if the ICAV is listed on a regulated market e.g. the main securities market of the Irish stock exchange fall under the PIE definition.
Under the rules of the Transparency Directive (Directive 2013/50/EU, Art. 1 Par. 6 amending Directive 2004/104/EC) if an issuer whose securities are admitted to trading on a regulated market only issues exclusively listed debt in denominations of at least €100,000 (€50,000 if debt is listed before 31 December 2010) it is exempt from the Transparency Directive reporting requirements. Under Directive 2014/56/EC, the definition of PIEs does not allow for any exemption for entities with exclusively listed debt in denominations of at least €100,000 (or denominations of at least €50,000 if the debt is listed before 31 December 2010).
GEM is not included in the regulated market listing as compiled by the European Securities and Markets Authority (ESMA). Any entity with debt solely listed on GEM does not fall under the PIE definition (unless it is captured in one of the other PIE definitions e.g. a credit institution).
Yes, irrespective of whether the securities are actively traded or not, the entity meets the definition of a PIE by having transferable securities which are admitted to trading on an EU regulated market (as well as governed by the law of a member state).
Any entity
• whose transferable securities are admitted to trading on a regulated market of any Member State, whose audit (either group or component audit) is carried out in Ireland; and
• who is governed by the law of a member state;
is defined as a PIE. However if the transferable securities are only listed on a regulated exchange outside of the EEA it does not fall under the PIE definition. Also important is where the is entity is incorporated. If the entity is incorporated outside of the EEA it is unlikely to fit the criteria of ‘entities governed by the law of a Member State’ and therefore falls out of scope of PIEs.
It depends, any client (e.g. a subsidiary) who meets the definition of public interest entity and whose audit is carried out in Ireland is a PIE. If the client group contains a PIE incorporated within the EEA, your client (the subsidiary) may fall within the definition of PIE. It is your responsibility to confirm that if this is the case or not.
Branches of PIEs do not normally fall under the definition of PIEs in themselves, as they do not have a legal personality, see EU Commission FAQs.
Public interest entities are defined per EU Directive 2014/56/EC The definition states that public interest entities mean:
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;
credit institutions as defined in point 1 of Article 3(1) of Directive 2013/36/EU of the European Parliament and of the Council, other than those referred to in Article 2 of that Directive; or Insurance undertakings within the meaning of Article 2(1) of Directive 91/674/EEC;
IAASA may raise a finding where a Firm policy has been breached, even if the requirements of standards and legislation have not been breached. As set out in Article 26 of EU Regulation 537, an inspection assesses both the design of the internal control system and testing compliance with that control system. In instances where the Firm policy has been breached and the matter remains compliant with standards/legislation, this will be noted in the report and will be considered in the rating process.
Findings contained in the inspection reports may relate to a number of ISAs or other requirements, all of which would not be disclosed in the report. Reports will however note whether a particular requirement comes from auditing standards, legislation or firm’s own policies and procedures and this information will be considered in the rating process.
Where a requirement is listed in more than one source, IAASA will reference the source highest on the following hierarchy:-
1. Legislation
2. Auditing standards
3. Firm policy
For firmwide findings, where findings are identified on issues that have already been raised by IAASA in the preceding 12 months, no action will be taken. This is because the relevant areas would be assessed again in either a follow up visit or as part of a full inspection after the 12 month implementation period. If, following the 12 month implementation period, repeat findings are identified, the severity indicator assigned to the finding would be elevated and a more robust recommendation would be required. This response is not generally applicable to individual audit inspection findings except in the rare circumstance where the same audit is selected for a second inspection within 12 months.
Yes, firmwide reports are shared with the CAI Professional Standards team, or other relevant RAB. The purpose of sharing the reports is to allow the Professional Standards team to understand any firmwide issues arising which may impact on their selections and/or procedures in relation to QA of non-PIE audits. The information is shared on condition that the Quality Assurance Committee and other non CAI employees, which includes practitioners, do not have access to the reports or extracts thereof. The Committee may be informed that the report has been shared and that it has impacted on the Professional Standards inspection approach. For any future entrants to the PIE market who may be members of other RABs, the structures of those RABs will be reviewed and similar safeguards considered. The reports are also used by CAI staff in performing their legislative functions of approval and registration of auditors and audit firms.
The 12 month recommendation implementation period is set out in Regulation (EU) 537/2014. All other timelines are set by IAASA to improve the efficiency of the inspection process. Section 1523 of the Companies Act 2014 gives IAASA the power to require a relevant person to provide specified documents within a specified period. Furthermore, section 906 of the Companies Act 2014 gives IAASA the power to adopt rules concerning any matter that relates to its functions and to do anything to facilitate the performance of its functions.
A competent authority from outside the state would not normally contact individual audit firms in relation to audit inspections. If you are contacted by a competent authority (supervisory body) from outside of the state please contact the Audit Quality Unit.
A. Section 1523 of the Companies Act 2014 states that: ‘Where it considers it reasonably necessary to do so for the purposes of performing a particular function under the relevant provisions, the Supervisory Authority may request information and inspect and make copies of all relevant documents in the possession or control of a recognised accountancy body or a relevant person; for that purpose, it may, by notice in writing served on the recognised accountancy body or relevant person, require the recognised accountancy body or relevant person either (as shall be specified) to—
(a) furnish to it specified documents or information,
or (b) permit it to have access, under specified circumstances, to all relevant documents in the possession or control of the recognised accountancy body or relevant person, within a specified period.’
Regulation (EU) 537/2014 Article 26.7 requires that: ‘At least the following internal quality control policies and procedures of the statutory auditor or the audit firm shall be reviewed:
• compliance by the statutory auditor or the audit firm with applicable auditing and quality control standards, and ethical and independence requirements, including those set out in Chapter IV of Directive 2006/43/EC and Articles 4 and 5 of this Regulation, as well as relevant laws, regulations and administrative provisions of the Member State concerned;
• the quantity and quality of resources used, including compliance with continuing education requirements as set out in Article 13 of Directive 2006/43/EC;
• compliance with the requirements set out in Article 4 of this Regulation on the audit fees charged.
Article 26.7 does not place restrictions on the requirements set out in the Directive, Regulation or applicable auditing, quality control and ethical standards. As such, the quality control procedures set out there and in the auditing and ethical standards extend to all audits, not just PIE audits. In assessing quality control procedures, IAASA includes all policies, procedures, clients and staff in relevant populations for sampling and does not restrict the populations to be only those in connection with PIE audits. This allows for the relevant Recognised Accountancy Body to only inspect non-PIE audits and not to assess internal quality control in respect of non-PIEs which would be a duplication of effort for all parties.
The Companies Act 2014 confers upon IAASA a number of powers to allow it to effectively carry out its functions. Some of the key powers utilised are listed below – please note that this list is not exhaustive.
S 906(1) The Supervisory Authority has the power to do anything that appears to it to be requisite, advantageous or incidental to, or to facilitate, the performance of its functions and that is not inconsistent with any enactment.
S 906(3) The Supervisory Authority may adopt rules and issue guidelines concerning any matter that relates to its functions (including its functions under Regulation (EU) No 537/2014).
S 1494(1) The Supervisory Authority shall put in place a quality assurance system as set out in Article 26 of Regulation (EU) No 537/2014.
S 1494(4) The Supervisory Authority may publish on its website the findings and conclusions of individual inspections undertaken as part of the quality assurance system referred to in subsection (1).
S 1523(1) Where it considers it reasonably necessary to do so for the purposes of performing a particular function under the relevant provisions, the Supervisory Authority may request information and inspect and make copies of all relevant documents in the possession or control of a recognised accountancy body or a relevant person; for that purpose, it may, by notice in writing served on the recognised accountancy body or relevant person, require the recognised accountancy body or relevant person either (as shall be specified) to –
(a) furnish to it specified documents or information, or
(b) permit it to have access, under specified circumstances, to all relevant documents in the possession or control of the recognised accountancy body or relevant person, within a specified period.
No. At present there is no fee charged by IAASA for submission of either auditor or company notifications
The system will confirm that a notification has been submitted as part of the online submission process. Due to the high volume of Notification Forms received, it is not IAASA’s policy to issue any further acknowledgements.
- Notifications must be submitted electronically by following this link.
No. Notification to IAASA on cessation of office by an auditor is only required in respect of companies registered in the Republic of Ireland. Consequently, where an auditor resigns or is removed as auditor from a group of companies, notification to IAASA is not required in respect of group companies registered outside the Republic of Ireland.
Yes. Where an auditor transfers clients from an unincorporated audit practice to an incorporated audit practice, the auditor must submit a Notification of Auditor Incorporation Form to IAASA. Details of all clients affected shall be submitted through the form. Notifications to IAASA may be submitted in batches as clients are transferred to the incorporated audit practice i.e. it is not necessary to transfer all clients simultaneously.
- Becoming audit exempt;
- Being liquidated; or
- Being struck off the Companies’ Register.
No. Where an auditor has ceased to hold office from a group of companies as defined by Irish Company Law (Section 8(3) of the Companies Act 2014), and the details of the cessation (date, reason etc.) are the same for each company within the group, then a single Auditor Notification Form and a single Company Notification Form in respect of the parent company are required to be submitted to IAASA. These forms must be accompanied by a list of the group companies from which the auditor has ceased to hold office, using the “List of Group Companies” sheet in the Auditor Notification Form or Company Notification Form, as appropriate.
In accordance with section 404 of the Companies Act 2014, within 30 days of the auditor ceasing to hold office, the company shall notify IAASA, using the Company Notification Form.
The Company Notification Form shall be accompanied by:
- in the case of resignation from office by the auditor, a copy of the notice of resignation served to the company, containing either a statement to the effect that there are no circumstances in connection with the resignation which should be brought to the notice of members or creditors of the company; or a statement of any such circumstances.
- in the case of removal from office of the auditor by the company:
- a copy of the resolution removing the auditor; and
- a copy of any representations in writing made to the company by the outgoing auditor, in relation to the intended resolution removing the auditor, except where such representations were not sent to the members of the company in consequence of an application to the court.
In accordance with section 403 of the Companies Act 2014, within 30 days of ceasing to hold office, the outgoing auditor shall notify IAASA, using the Auditor Notification Form.
The Auditor Notification Form shall be accompanied by:
- in the case of resignation from office by the auditor, a copy of the notice of resignation served to the company, containing either a statement to the effect that there are no circumstances in connection with the resignation which should be brought to the notice of members or creditors of the company; or a statement of any such circumstances.
- in the case of removal of the auditor from office by the company, a copy of any representations in writing made to the company by the outgoing auditor, in relation to the intended resolution removing the auditor, except where such representations were not sent to the members of the company in consequence of an application to the court.
You may withdraw your authorisation by sending a request in writing to info@iaasa.ie
IAASA’s role is in respect of Category 5 liquidators is limited to authorisation of certain individuals who applied to the Authority prior to 1 December 2017. IAASA does not have any ongoing supervisory or investigation role in respect of any liquidators.
The Corporate Enforcement Authority (CEA) supervises liquidators in the proper discharge of their duties. Complaints in respect of the performance of liquidators should be directed to the CEA. Further details on the CEA’s functions in this regard are available here.
In accordance with the 2014 Act, IAASA has made Regulations setting professional Indemnity cover requirements for liquidators required by Section 634 of the 2014 Act. Statutory Instrument 127 of 2016 Companies Act 2014 (Professional Indemnity Insurance)(Liquidators) Regulations 2016 came into effect on 1 June 2016.
In summary, the professional indemnity insurance shall provide a limit of liability for each and every claim of not less than €1,500,000 and provide cover for defence costs. This insurance shall be at a level which is commensurate with the value and nature of the work undertaken by the insured. There is also a requirement for run-off cover.
It is a matter for individuals currently acting as liquidators to seek their own advice to ensure that they are in compliance with all legal and professional requirements in relation to their acting as liquidator in any particular case.
The closing date for receipt of applications under Category 5 was 1 December 2017 and this category is now closed.
In summary, those who may currently qualify for appointment as a liquidator in Ireland are:
i) A member of a prescribed accountancy body holding a current practising certificate issued by that accountancy body. Contact details for all five prescribed accountancy bodies are available here .
ii) A solicitor holding a current practising certificate issued by the Law Society of Ireland. The law society website link is available here.
iii) A person who is a member of a professional body which IAASA may recognise for the purpose of liquidator activities (there is no body recognised for this purpose).
iv) A person entitled under the laws of an EEA state to act as a liquidator in insolvency proceedings.
v) A person with practical experience of windings-up and knowledge of relevant law who stands authorised for the time being by IAASA to be so appointed. These are known as Category 5 liquidators. A list of persons approved under category 5 is available here.
IAASA’s Annual Reports provide an outline of the examinations undertaken and the outcome of those examinations.
In addition, the Transparency (Directive 2004/109/EC) (Amendment) Regulations 2015 (S.I. 44/2015), which came into operation on 9 February 2015, afforded IAASA discretion in terms of publication of its financial reporting findings. IAASA’s Policy Paper on Publication of IAASA’s Financial Reporting Enforcement Findings sets out IAASA’s policy as to the circumstances in which decisions will be published, the nature of the information to be published and the process to be followed in making such publication. These published decisions are available on the Publications section of this website.
Having examined an issuer’s financial report, IAASA corresponds with the directors seeking further information and/or clarification. IAASA may meet with issuer representatives.
When all information, clarifications and/or explanations necessary has been obtained, IAASA will make an assessment as to whether the periodic financial report is in compliance with the relevant reporting framework have been obtained.
The range of outcomes to an examination are:
- no apparent instances of non-compliance has been detected and the examination is closed;
- less significant instances of instances of non-compliance are detected and undertakings are sought that such maters will be rectified in future periodic financial statements;
- significant instances of instances of non-compliance are detected and revised financial statements are prepared and published.
In addition, the financial reporting decision may warrant publication in accordance with IAASA’s Policy Paper on Publication of IAASA’s Financial Reporting Enforcement Findings.
Having examined an issuer’s periodic financial report, it may appear that there are issues arising in respect of which further information and/or clarification is required. In such cases, IAASA corresponds with those charged with the issuer’s governance, i.e. the directors. In such correspondence, the matters arising are set out in detail and the issuer’s directors are requested to respond in writing, providing any information, clarification and/or explanations considered necessary.
Where directors’ responses do not fully address the issue(s) raised or, as is frequently the case, directors’ responses require further elaboration and/or clarification, IAASA typically enters into further correspondence with the directors. In instances where it is deemed more effective to do so, IAASA holds face-to-face meetings with issuer representatives, until such time as all information, clarifications and/or explanations necessary to enable an assessment to be made as to whether the periodic financial report is in compliance with the relevant reporting framework have been obtained.
When all information deemed necessary has been received, IAASA determines whether the particular financial reporting treatment adopted and/or disclosures provided are in compliance with the relevant reporting framework.
It is important to note that not all matters raised with issuers’ directors suggest potential non-compliance with the relevant reporting framework.
Rather, as considered necessary, IAASA seeks further information and/or clarification from issuers’ directors for the purpose of enabling it to better understand the basis for certain of their financial reporting judgments in preparing periodic financial reports, including their judgments relating to recognition, measurement, classification, presentation and disclosure.
On receipt of such further information and/or clarification from issuers’ directors, matters raised by IAASA in initial correspondence may be closed without the need for re-statement, additional disclosure or other actions on the part of the issuer.
Based on experiences to date, IAASA has found that those issuers that are most forthcoming with the requisite information, clarifications and explanations are those that bring their contacts with IAASA to a successful conclusion in the most efficient and expeditious manner.
In summary, IAASA’s risk-based approach to the selection of financial reports for examination considers the:
- risk of material misstatement in issuers’ financial reports; and
- potential impact of such a misstatement on the users of financial reports.
IAASA is committed to the application of ESMA standards and guidelines on enforcement of financial reporting. ESMA standards and guidelines require that selection methodologies must include risk-based methodologies. It is not, for example, permitted under ESMA standards and guidelines to adopt selection methodologies based purely on cycles or random selections.
IAASA has adopted a mixed model, whereby selections of issuers’ financial reports for examination is based on risk assessments, supplemented by cyclical and/or random selections (thereby ensuring that issuers that might not be selected as a consequence of a risk-based approach nevertheless stand to be selected for examination).
IAASA has determined that there are many risk factors, or combinations thereof, that should be considered in assessing the relative risk of an incidence of material misstatement in an issuer’s financial reports. These include, amongst others:
- financial structure and business/economic trends;
- financial position and ratios;
- industry specific issues;
- audit qualifications and related issues;
- corporate governance and control environment issues;
- incidence of related party transactions;
- incidence of business combinations and/or disposals;
- administrative, court and/or regulatory actions; and
- third party signals (e.g. complaints received by IAASA, media commentary, etc).
In assessing the potential impact of a material misstatement on the users of financial reports, the following are among the factors that are considered:
- share trading activity and volatility in stock price;
- market capitalisation;
- number and nature of investors;
- nature of securities traded; and
- public profile.
Where instances of non-compliance are identified in an issuer’s periodic financial report, the potential for that issuer’s subsequent periodic financial reports to be the subject of examination increases.
IAASA has entered into Memoranda of Understanding (MoUs) with the Central Bank of Ireland and the Corporate Enforcement Authority (CEA). From time to time, IAASA receives referrals from these and other parties. The receipt of a referral from another statutory body is treated as a risk factor and is, therefore, incorporated into IAASA’s risk assessment and selection processes.
- European accounting enforcement activities are co-ordinated through the ESMA-sponsored European Enforcers Co-Ordinations Sessions (EECS).
The European Communities (International Financial Reporting Standards and Miscellaneous Amendments) Regulations 2005 (S.I. 116/2005) gives effect to Directive 2003/51/EC of the European Parliament and of the Council of 18 June 2003 (‘the IAS Regulation’).
The IAS Regulation:
- requires that certain EU entities (i.e. those admitted to trading on a regulated market and having a requirement to prepare consolidated financial statements) prepare their consolidated financial statements in accordance with IFRS as adopted for use in the EU (i.e. IFRS as endorsed by the EU ); and
- makes reference to Member States’ requirement to take appropriate measures to ensure compliance with IFRS.
To facilitate these requirements, ESMA established the EECS. EECS comprises:
- Member States’ securities regulators; and
- where Member States’ securities regulators are not charged with primary responsibility for the enforcement of financial reporting standards, the relevant enforcement body.
In counties such as Ireland, the UK, Germany, Iceland and Denmark, it is the relevant enforcement body, i.e. IAASA in the Irish context, which is the member of EECS. In most other jurisdictions, it is the securities regulator who is the EECS member.
The role of EECS is to facilitate co-operation and co-ordination between European national accounting enforcers with a view to bringing about the consistent enforcement of IFRS across the EU. EECS on-going regular activities include:
- discussing accounting enforcement decisions taken by EU national accounting enforcers;
- discussing emerging issues currently under examination by EU national accounting enforcers;
- contributing to the confidential database of enforcement decisions;
- publishing, for the benefit of issuers and other interested parties, summaries of enforcement decisions posted to the EECS database;
- publishing (via ESMA) annual activity reports on the enforcement of IFRS in Europe, the purpose of which is to provide stakeholders with an overview of the monitoring and enforcement of IFRS across the EU;
- sharing and comparing practical experiences in the field of accounting enforcement such as selection, risk assessment, examination methodology, contacts with issuers and auditors, etc; and
- holding meetings with representatives of the IFRS Interpretations Committee (IFRS IC) in order to discuss complex issues identified by EECS members either for which there is no specific IFRS guidance or where widely diverging interpretations exist.
EECS meetings aid discussion by European national accounting enforcers to:
- share the reasoning underpinning their enforcement decisions with their counterparts; and
- canvass their counterparts’ views on enforcement cases currently being dealt with, to achieve a consistent approach to enforcement across all EU Member States.
To achieve this objective, EECS (via ESMA) has established a database of enforcement decisions taken by national accounting enforcers. The content of this database is confidential and available to EU national accounting enforcers and ESMA only.
While the decisions taken by European national accounting enforcers do not constitute precedent and are not, therefore, binding on other enforcement authorities, the purpose of the database is to enable European national accounting enforcers to consider decisions taken by their counterparts on similar issues and to determine the extent, if any, to which they may be relevant to their own decision making (while recognising that the circumstances surrounding individual cases are rarely the same).
EECS, in conjunction with ESMA, publishes enforcement decisions taken by EECS members. Such public information does not disclose the specific issuers or individual jurisdictions by name but, rather, is published on an anonymous basis for the purpose of informing interested parties including issuers, auditors, shareholders, analysts and regulators.
ESMA Standards and Guidelines
ESMA publishes mandatory Guidelines with which EU national competent authorities are required to comply. IAASA is committed to applying ESMA standards and guidelines.
In particular, IAASA is committed to applying:
- ESMA Guidelines on enforcement of financial information (ref. 4 February 2020 | ESMA32-50-218)
These Guidelines, which apply to all EU competent authorities, including IAASA, undertaking enforcement of financial information under the EU Transparency Directive, apply in relation to the enforcement of financial information under the EU Transparency Directive to ensure that financial information in harmonised documents provided by issuers whose securities are admitted to trading on a regulated market comply with the requirements resulting from the EU Transparency Directive.
Competent authorities to which these Guidelines apply, which includes IAASA, comply by incorporating them into their supervisory practices. Responsibility for compliance with the provisions of the EU Transparency Directive remains with the designated competent authority. Competent authorities remain under the obligation to make every effort to comply with these guidelines.
- ESMA Guidelines on Alternative Performance Measures (APMs) (ref. ESMA/2015/1415en))
These Guidelines, which apply to APMs disclosed by issuers or persons responsible for the prospectus when publishing regulated information or prospectuses on or after 3 July 2016, apply in relation to APMs disclosed by issuers or persons responsible for the prospectus when publishing regulated information and prospectuses (and supplements). Examples of regulated information are management reports disclosed to the market in accordance with the EU Transparency Directive.
The Guidelines do not apply to APMs:
- disclosed in financial statements;
- disclosed in accordance with applicable legislation which sets out specific requirements governing the determination of such measures. Therefore, the guidelines do not apply to measures included in prospectuses such as pro forma financial information, related party transactions, profit forecasts, profit estimates, working capital statements and capitalisation and indebtedness for which the specific requirements of the prospectus regime apply.
IAASA is committed to applying ESMA standards and Guidelines.
In particular, IAASA applies the ESMA Guidelines on enforcement of financial information (ref. 4 February 2020).
These Guidelines, which apply to all EU competent authorities, including IAASA, undertaking enforcement of financial information under the EU Transparency Directive, apply in relation to the enforcement of financial information under the EU Transparency Directive to ensure that financial information in harmonised documents provided by issuers whose securities are admitted to trading on a regulated market comply with the requirements resulting from the EU Transparency Directive.
Competent authorities to which these Guidelines apply, which includes IAASA, comply by incorporating them into their supervisory practices. Responsibility for compliance with the provisions of the EU Transparency Directive remains with the designated competent authority. Competent authorities remain under the obligation to make every effort to comply with these guidelines.
These Guidelines require that EU national accounting enforcers’ selection methodologies must include risk-based methodologies. IAASA’s selection of issuers’ periodic financial reports for examination is based on a mixed model, i.e. whereby risk assessments are supplemented by cyclical and random selections.
- Depending upon risk factors identified and other relevant considerations, examinations undertaken by IAASA can be categorised as being:
- Interactive unlimited examination of financial information
The evaluation of the entire content of the financial information included in one or more harmonised documents of an issuer in order to identify issues / areas that, in IAASA’s opinion, need further analysis, and the subsequent assessment of whether the financial information regarding those issues / areas is in accordance with the relevant financial reporting framework. The interactive unlimited examination entails an interaction between IAASA and the issuer. Based on the examination procedures undertaken and the information received from the issuer, IAASA concludes whether it has discovered infringements in relation to the issues / areas analysed.
- Desktop unlimited examination of financial information
The evaluation of the entire content of the financial information included in one or more harmonised documents of an issuer in order to identify issues / areas that, in IAASA’s opinion, need further analysis, and the subsequent assessment of whether the financial information regarding those issues / areas is in accordance with the relevant financial reporting framework. The desktop unlimited examination does not entail any interaction between IAASA and the issuer. Based on the examination procedures undertaken, IAASA concludes whether there are indications that infringements exist in the financial information analysed.
- Interactive focused examination of financial information
The assessment of whether pre-defined issues / areas in the financial information included in one or more harmonised documents of an issuer are in accordance with the relevant financial reporting framework. The interactive focused examination entails an interaction between IAASA and the issuer. Based on the examination procedures undertaken and the information received from the issuer, IAASA concludes whether it has discovered infringements in relation to the pre-defined issues / areas analysed.
- Desktop focused examination of financial information
The assessment of whether pre-defined issues / areas in the financial information included in one or more harmonised documents of an issuer are in accordance with the relevant financial reporting framework. The desktop focused examination does not entail any interaction between IAASA and the issuer. Based on the examination procedures undertaken, IAASA concludes whether there are indications that infringements exist in relation to the pre-defined issues / areas analysed.
- Follow-up examination of actions
The assessment of whether an issuer has taken appropriate remedial actions in instances where the issuer has provided undertakings to IAASA or against which IAASA has taken actions.
- Thematic examination of financial information
The assessment of financial reporting practices adopted by a range of issuers in respect of one or more financial reporting matters. These examinations are desktop-based and are limited to examining publicly published information without issuer engagement.
- Topical surveys
These surveys, mandated by ESMA, comprise the examination of the financial reporting treatments applied by selected issuers based on parameters set by ESMA. These surveys are also desk-based and limited to examining publicly published information without issuer engagement. If, as a result of its findings from these surveys, IAASA subsequently engages with an issuer, that subsequent engagement is designated as a separate unlimited scope examination or focused examination as appropriate.
- Issuers are required to prepare and publish annual and half-yearly financial statements providing minimum specified material and with specified timelines.
Issuers’ periodic financial reporting requirements, which come within the IAASA financial reporting examination remit and as laid down by Regulations 4 to 8 of the Transparency (Directive 2004/109/EC) Regulations 2007 (S.I. 277/2007) (as amended), are as follows:
Annual financial reports
Issuers are required to make public their annual financial reports not later than four months after the end of their financial year. Issuers are further required to ensure that their financial reports remain publicly available for at least ten years following publication. Issuers’ annual financial reports are required to comprise, at a minimum:
- Audited financial statements
Where an issuer is required to prepare consolidated financial statements, the audited financial statements must be prepared in accordance with IFRS as adopted for use in the EU . Where an issuer is not required to prepare consolidated financial statements, the audited financial statements included in the annual financial report must be prepared in accordance with the national law of the Member State in which the issuer is incorporated;
- a Management Report
- a Responsibility Statement
This is a statement made by persons responsible within the issuer to the effect that, to the best of their knowledge, the financial statements, prepared in accordance with applicable financial reporting standards, give a true and fair view of the profit/loss and assets, liabilities and financial position of the issuer and the undertakings included in the consolidation taken as a whole, and that it includes a fair examination of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
Half-yearly financial reports
Issuers of shares and, subject to certain exemptions, debt securities are required to make public their half-yearly financial reports not later than three months after the end of the first six months of their financial years. Issuers are further required to ensure that their financial reports remain publicly available for at least ten years following publication. Issuers’ half-yearly financial reports are required to comprise, at a minimum:
- Condensed financial statements
Where an issuer is required to produce consolidated financial statements, the condensed financial statements must be prepared in accordance with IFRS as adopted for use in the EU . Where an issuer is not required to prepare consolidated financial statements, the issuer shall follow the same principles for recognition and measurement as when preparing annual financial reports and the condensed financial statements must include at least the following:
- a condensed balance sheet;
- a condensed profit and loss account; and
- explanatory notes.
- an Interim Management Report
- a Responsibility Statement
This is a statement made by persons responsible within the issuer to the effect that, to the best of their knowledge, the financial statements, prepared in accordance with applicable financial reporting standards, give a true and fair view of the profit/loss and assets, liabilities and financial position of the issuer and the undertakings included in the consolidation taken as a whole and that it includes a fair examination of:
- important events that have occurred during the first six months of the year;
- the impact of those events on the condensed financial statements;
- a description of the principal risks and uncertainties for the remainder of the financial year; and
- in the case of issuers of shares, details of material related party transactions.
In addition, issuers are also required to comply with the Central Bank (Investment Market Conduct) Rules 2019 (S.I. No. 366/2019) published by the Central Bank of Ireland when preparing annual and half-yearly financial reports.
Following its adoption by the European Parliament and Council on 15 December 2004, the EU Transparency Directive came into effect in Ireland from 13 June, 2007. The EU Transparency Directive has been transposed into Irish law through a combination of:
- primary legislation (sections 1379 to 1384 of the Companies Act 2014); and
- secondary legislation (Transparency (Directive 2004/109/EC) Regulations 2007 (S.I. 277 /2007) as amended by:
The EU Transparency Directive applies to issuers whose securities have been admitted to trading on a regulated market situated, or operating, within the EU.
IAASA’s role under the EU Transparency Directive is to examine the annual and half-yearly financial statements of entities whose securities (shares and debt) are admitted to trading on a regulated market. In IAASA’s case, such entities are primarily equity, debt and closed-ended investment funds whose securities are admitted to trading on the Main Market of Euronext Dublin.
IAASA is designated the authority as an independent competent authority for the purposes of Article 24(4)(h) of the EU Transparency Directive, i.e. for examining information prepared pursuant to the EU Transparency Directive’s requirements.
Regulation 42(2) of the Transparency (Directive 2004/109/EC) Regulations (S.I. 277/2007) provides that
‘IAASA shall examine information drawn up pursuant to Regulations 4 to 8 by issuers whose home Member State is the State for the purpose of considering whether such information is in accordance with the relevant reporting framework’.
- The EU Transparency Directive (Directive 2004/109/EC) (‘the Directive’) harmonises the information requirements applying to entities whose securities have been admitted to trading on a regulated market situated, or operating, in the EU. Specifically, the EU Transparency Directive seeks to enhance transparency in EU capital markets through a common framework which requires:
- the production of periodic financial reports;
- shareholders to disclose major shareholdings;
- the dissemination of regulated information; and
- the provision of central mechanisms for sharing regulated information.
The EU Transparency Directive came into effect in Ireland from 13 June 2007. The EU Transparency Directive has been transposed into national law through a combination of:
- primary legislation (sections 1379 to 1384 of the Companies Act 2014); and
- secondary legislation (Transparency (Directive 2004/109/EC) Regulations 2007 (S.I. 277 /2007) as amended by:
- Transparency (Directive 2004/109/EC) (Amendment) Regulations 2010 (S.I. 102/2010);
- Transparency (Directive 2004/109/EC) (Amendment) Regulations 2012 (S.I. 238/2012);
- Transparency (Directive 2004/109/EC) (Amendment) (No. 2) Regulations 2012 (S.I. 316/2012);
- Transparency (Directive 2004/109/EC) (Amendment) Regulations 2015 (S.I. 44/2015);
- Transparency (Directive 2004/109/EC) (Amendment) (No. 2) Regulations 2015 (S.I. 541/2015);
- Companies (Accounting) Act 2017 (No. 9 of 2017); and
- Transparency (Directive 2004/109/EC) Amendment Regulations 2017 (S.I. No.336 of 2017).
The Authority’s financial statement review remit derives from Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (the EU Transparency Directive), as transposed into Irish Law.
What is the EU Transparency Directive?
The EU Transparency Directive was introduced to harmonise information requirements applying to entities whose securities have been admitted to trading on a regulated market situated, or operating, within the EU (‘issuers’). Accordingly, the EU Transparency Directive applies to issuers of shares, debt securities, derivative securities and closed-ended investment funds admitted to listing and trading on the regulated market of the Irish Stock Exchange. The EU Transparency Directive sets out a number of transparency requirements regardingthe disclosure of periodic and ongoing information, including issuers’ obligations relating to publication, content and timing of issuers’ financial reports.
The EU Transparency Directive has been implemented in Ireland through a combination of:
- primary legislation (sections 1379 to 1384 of the Companies Act 2014); and
- secondary legislation (Transparency (Directive 2004/109/EC) Regulations 2007 (S.I. 277 /2007) as amended by:
What is IAASA’s role under the EU Transparency Directive?
Recital No. 28 of the EU Transparency Directive states that:
‘A single competent authority should be designated in each Member State to assume final responsibility for supervising compliance with the provisions adopted pursuant to this Directive…Member States may, however, designate another competent authority for examining that information referred to in this Directive is drawn up in accordance with the relevant reporting framework and taking appropriate measures in case of discovered infringements;’.
While the Central Bank of Ireland is the central administrative authority for the purposes of the EU Transparency Directive, IAASA has been designated a separate competent authority for the purposes of the financial reporting monitoring and enforcement role described above (i.e. Article 24(4)(h) of the EU Transparency Directive). IAASA, through its Financial Reporting Supervision Unit, is responsible for examining affected issuers’ compliance with the financial reporting framework requirements set out in the EU Transparency Directive as transposed into Irish law and for taking appropriate action where non-compliance is identified.
What is the ‘relevant reporting framework’?
The ‘relevant reporting framework’ has been defined by ESMA as:
‘IFRS and financial reporting frameworks deemed equivalent with IFRS based on the EC Regulation 1569/2007 as well as national generally accepted accounting principles (national GAAPs) used in the EEA. This also includes requirements for management reports resulting from the Directive on the annual financial statements’.
In order to legitimately act as an auditor under the Companies Acts (i.e. to audit the financial statements of an entity ), a person/firm must be a Registered Auditor. To become a registered auditor, a person/firm must:
- Be a member of a recognised accountancy body; and have been authorised by that body to act as an auditor i.e. hold a valid practising/audit certificate; or
- an EU member firm recognised for the purpose of statutory audit by a recognised accountancy body.
The Companies Registration Office (CRO) maintains a register of all persons entitled to act as auditors and enquiries can be directed to that Office.
Alternatively, enquiries as to whether an individual/firm is qualified to act as an auditor can be directed to the recognised body in question. Some accountancy bodies also provide detailed information on their websites. Contact details for each recognised accountancy body can be obtained here.
Acting as an auditor while not qualified to do so is a serious criminal offence. In the event that a member of the public has reason to believe that a person/firm is acting, or has acted, as an auditor without being properly qualified to do so, the matter should be brought to the attention of:
- IAASA;
- The Office of the Director of Corporate Enforcement; and
- If the person/firm is a member of an accountancy body, the accountancy body in question.
- A Prescribed Accountancy Body (‘PAB’) is any accountancy body that comes within the supervisory remit of IAASA under the Act. There are currently five PABs each of which has its own formal system for dealing with complaints relating to its members/member firms, including, where necessary an investigation and disciplinary process. The five PABs and the designatory letters for their members are:
Accountancy Body Full Name Designatory Letters ACCA Association of Chartered Certified Accountants ACCA or FCCA AIA Association of International Accountants AAIA or FAIA CIMA Chartered Institute of Management Accountants ACMA or FCMA CIPFA Chartered Institute of Public Finance and Accountancy CPFA ICAI Institute of Chartered Accountants in Ireland ACA or FCA; CPA or FCPA The following bodies are no longer PABs
- The Institute of Chartered Accountants in England & Wales ceased to be a PAB on 21 July 2021.
- The Institute of Chartered Accountants of Scotland ceased to be a PAB on 22 December 2021.
- The Institute of Certified Public Accountants in Ireland ceased to be a PAB on 1 September 2024.
If you have a complaint about a PABs non-compliance with its approved investigation and discipline procedures, the matter can be referred to IAASA.
The complaint process
Following the receipt of a complaint which indicates an instance of non-compliance with the PABs procedures, if the matter cannot be dealt with by IAASA’s regulatory procedures, then the matter may be referred to IAASA’s Board for direction as to how to proceed, for example, whether the matter should be enquired into under Section 933 (formerly Section 23) of the Companies Act 2014. The decision as to whether to initiate such an enquiry is at the sole discretion of the Board of IAASA.
In instances where the matter is of significant public interest, IAASA has a statutory power to initiate an investigation of possible breaches of PABs standards by a PAB member under Section 934 (formerly Section 24) of the Companies Act 2014. The decision as to whether to initiate such an investigation is at the sole discretion of the Board of IAASA.
Under the model of independent statutory oversight set out in the Companies Act 2014 the Authority’s role is to supervise how the PABs regulate and monitor their members which includes the PABs complaints handling, investigation and disciplinary processes
Primary responsibility for the receipt and investigation of complaints relating to the prescribed accountancy bodies’ (‘PABs) members/member firms resides with the PABs, who are required to process complaints in accordance with approved procedures.
Extent of IAASA’s powers in relation to complaint’s
Complainants and prospective complainants are requested to note that IAASA’s role in the complaints process is to supervise the PABs compliance with their approved investigation and disciplinary procedures;that IAASA has no role in facilitating, or participating in, the resolution of individual complaints.
- IAASA does not operate a system of final appeal against decisions taken by the PABs’ complaints, disciplinary or appeals committees/tribunals
- Lodging a complaint with IAASA is not, and is not designed to be, a substitute for civil proceedings.
If you want to make a complaint about your accountant/auditor or a firm of accountants/auditors, you should initially contact the Prescribed Accountancy Body (‘PAB’) of which the accountant/auditor/firm is a member. Please click here for contact details for the PABs.
If the complaint relates to the audit of a Public Interest Entity (PIE), you should refer your complaint directly to IAASA – http://www.iaasa.ie/contact
In order to legitimately act as an auditor under the Companies Acts (i.e. to audit the financial statements of an entity), a person/firm must be a Registered Auditor. To become a registered auditor, a person/firm must:
- Be a member of a recognised accountancy body; and have been authorised by that body to act as an auditor i.e. hold a valid practising/audit certificate; or
- EU member firm recognised for the purpose of statutory audit by a recognised accountancy body.
The Companies Registration Office (CRO) maintains a register of all persons entitled to act as auditors and enquiries can be directed to that Office.
Alternatively, enquiries as to whether an individual/firm is qualified to act as an auditor can be directed to the recognised body in question. Some accountancy bodies also provide detailed information on their websites. Contact details for each recognised accountancy body can be obtained here.
Acting as an auditor while not qualified to do so is a serious criminal offence. In the event that a member of the public has reason to believe that a person/firm is acting, or has acted, as an auditor without being properly qualified to do so, the matter should be brought to the attention of:
- IAASA;
- the Corporate Enforcement Authority; ; and
- if the person/firm is a member of an accountancy body, the accountancy body in question.
- IAASA on occasion receives queries from members of the public in relation to selecting an accountant or auditor. IAASA recommends selecting an individual who is a full member of a body which comes within the supervisory remit of IAASA. These bodies fall into two categories, Prescribed Accountancy Bodies (PABs) and Recognised Accountancy Bodies (RABs). Individuals who are not full members of these bodies do not come under the remit of IAASA. Accordingly, they are not subject to compliance with regulations, investigation and disciplinary systems or ongoing continuous professional development requirements. Prescribed Accountancy Body (accountants)Five accountancy bodies have been granted PAB status in Ireland and therefore come under IAASA’s supervision. Individuals who are members of a PAB and who wish to practice as an accountant must obtain approval, usually in the form of a practising certificate from the relevant PAB.Recognised Accountancy Body (accountants and auditors)
Of the five PABs, three have also been granted RAB status. Only the RABs may train, authorise and regulate their members to act as statutory auditors in Ireland. Therefore, only a suitably qualified member of a RAB who has been authorised as an auditor can be selected to undertake audits required under Irish legislation. Details of such auditors are listed on the Auditor Register, which is available on the Companies Registration Office website
A list of the five PABs and two RABs and the designatory letters in order to identify their full members are outlined below:
Accountancy Body Full Name Designatory Letters PAB / PAB & RAB ACCA Association of Chartered Certified Accountants ACCA or FCCA PAB & RAB AIA Association of International Accountants AAIA or FAIA PAB CIMA Chartered Institute of Management Accountants ACMA or FCMA PAB CIPFA Chartered Institute of Public Finance and Accountancy CPFA PAB ICAI Institute of Chartered Accountants in Ireland ACA or FCA PAB & RAB Contact details for each of the five PABS are available here.
(i) Prescribed Accountancy Body
A Prescribed Accountancy Body is any accountancy body that comes within the supervisory remit of the Authority. There are currently five prescribed bodies:
- ACCA – Association of Chartered Certified Accountants;
- AIA – Association of International Accountants;
- CIMA – Chartered Institute of Management Accountants;
- CIPFA – Chartered Institute of Public Finance & Accountancy;
- CAI – Institute of Chartered Accountants in Ireland; and
Links to the prescribed accountancy bodies’ websites can be found here.
(ii) Recognised Accountancy Body
A Recognised Accountancy Body is an accountancy body that has been granted recognition under section 930 of the Companies Act 2014. A recognised accountancy body is permitted to authorise its members and/or member firms to perform statutory audits and to register firms from other EU Member States to perform audits under the Companies Act, provided that they satisfy certain additional conditions. There are currently two recognised bodies:
- ACCA – Association of Chartered Certified Accountants;
- CAI – Institute of Chartered Accountants in Ireland; and
IAASA is a State body by virtue of having been established by an Act of the Oireachtas (the Irish parliament), i.e., the Companies (Auditing and Accounting) Act 2003. The provisions of this Act are now incorporated into the Companies Act 2014.
Notwithstanding its status as a State body, the Authority’s independence in the discharge of its functions is protected by legislation and it operates as a company limited by guarantee. Section 910 of the 2014 Act provides that the Minister shall not give direction to IAASA concerning the discharge of its work programme.
General Funding
As provided for by its founding legislation, 40% of IAASA’S funding is provided by the Exchequer (via the Department of Enterprise, Trade & Employment). The remaining 60% is provided jointly by the prescribed accountancy bodies, by way of a mandatory annual levy. The size of the levy allocated to each individual prescribed accountancy body is determined by an apportionment model agreed by the bodies and approved by the Board of the Authority and the Minister for Enterprise, Trade & Employment respectively.
Reserve Fund
The Authority is required to maintain a Reserve Fund for the purposes of funding certain investigative and/or enforcement actions should the need arise. The Reserve Fund is funded by the Exchequer and by the levies on the prescribed accountancy bodies outlined above. In addition, fine income is credited to the Reserve Fund.
EU responsibilities.
Under the Transparency (Directive 2004/109/EC) Regulations, IAASA has been designated as the competent authority for the purposes of Article 24(4)(h) of the EU Transparency Directive. This makes IAASA responsible for monitoring the periodic financial reporting of certain entitles whose securities are listed on a regulated market in the EU and for taking appropriate enforcement action in cases of infringement. This function is fully Exchequer funded.
Obligations under the Part 27 of the Companies Act 2014 are funded by way of levy on firms provided audit services to Public Interest Entities (‘PIE Audit Firms’). The size of the levy allocated to each PIE Audit Firm is determined by an apportionment model agreed by the firms and approved by the Board of the Authority and the Minister respectively.
The principal objectives of the Authority, which are set out in section 904 of the Companies Act 2014, are:
- To supervise how the prescribed accountancy bodies regulate and monitor their members,
- To promote adherence to high professional standards in the auditing and accountancy profession, including the assurance of sustainability reporting,
- To monitor whether the financial statements, accounts or where applicable, sustainability reporting of certain classes of companies and other undertakings comply with the Companies Acts and, where applicable, Article 4 of the IAS Regulation,
- To act as a specialist source of advice to the Minister on auditing and accounting matters, and the assurance of sustainability reporting and
- To oversee statutory auditors, the conduct of statutory audits and, where applicable, the carrying out of assurance of sustainability reporting in accordance with the relevant provisions and perform functions under those provisions in relation to such oversight.
Further details on the Authority’s role, functions and powers can be found here