EUROPEAN UNION (STATUTORY AUDITS) (DIRECTIVE 2006/43/EC, AS AMENDED BY DIRECTIVE 2014/56/EU, AND REGULATION (EU) NO 537/2014) REGULATIONS 2016
Source: Iris Oifigiúl 2016-06-17

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paragraphs: (1) These Regulations may be cited as the European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No 537/2014) Regulations 2016.
(2) These Regulations shall come into operation on 17 June 2016.
(3) These Regulations shall be read as one with the Companies Act 2014 (No. 38 of 2014).
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paragraphs: (1) Subject to paragraph (2), the European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 ( S.I. No. 220 of 2010 ) are revoked.
(2) Subject to Regulation 143(3), the 2010 Audits Regulations, as in force immediately before 17 June 2016—
(a) in so far as they related to the conduct of statutory audits and the duties and powers of statutory auditors and audit firms in relation thereto for financial years commencing before that date, shall continue to apply to the conduct of statutory audits and the duties and powers of statutory auditors and audit firms in relation thereto for those financial years, and
(b) as regards each other matter provision for which was made by those Regulations before that date, shall continue to make such provision before that date.
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paragraphs: Save where otherwise provided (including provided by Regulation (EU) No 537/2014), these Regulations apply—
(a) in so far as they relate to the conduct of statutory audits and the duties and powers of statutory auditors and audit firms in relation thereto, to the conduct of statutory audits for financial years commencing on or after 17 June 2016, and
(b) as regards each other matter provision for which is made by these Regulations, on and from 17 June 2016.
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paragraphs: (1) In these Regulations—
(a) the record of audit procedures performed,
(b) relevant audit evidence obtained, and
(c) conclusions reached,
(a) in relation to the Supervisory Authority and an audited entity, shall be construed in accordance with section 288 of the Companies Act 2014 , and
(b) in relation to a statutory auditor or audit firm, means—
(i) subject to subparagraph (ii), any period in respect of which a profit and loss account or income statement is prepared by the auditor or audit firm for income tax or other business purposes, or
(ii) in the case of a statutory audit firm that is a company, any period in respect of which accounts under the Companies Act 2014 are prepared by the firm,
(a) a Member State in which a statutory auditor approved by his or her home Member State seeks to be also approved in accordance with Article 14 of the Audit Directive, or
(b) a Member State in which an audit firm approved by its home Member State seeks to be registered, or is registered, in accordance with Article 3a of the Audit Directive;
(a) the one or more statutory auditors designated by a statutory audit firm for a particular audit engagement as being primarily responsible for carrying out the statutory audit on behalf of the audit firm,
(b) in the case of a group audit, at least the one or more statutory auditors designated by a statutory audit firm as being primarily responsible for carrying out the statutory audit at the level of the group and the one or more statutory auditors designated as being primarily responsible at the level of material subsidiaries, or
(c) the one or more statutory auditors who sign the audit report;
(a) which is aimed at cooperation and to which the statutory auditor or audit firm belongs;
(b) either—
(i) the clear objective of which is profit or cost-sharing, or
(ii) which shares—
(I) common ownership, control or management,
(II) common quality control policies and procedures,
(III) a common business strategy, or
(IV) the use of a common brand-name or a significant part of pro-fessional resources;
(a) 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 of the European Parliament and of the Council of 21 April 20045 on markets in financial instruments amending Council Directives 85/611/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EC,
(b) credit institutions as defined in point 1 of Article 3(1) of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 20136 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (but excluding credit institutions referred to in Article 2 of Directive 2013/36/EU), and
(c) insurance undertakings within the meaning of Article 2(1) of Directive 91/674/EEC of 19 December 19917 on the annual accounts and consolidated accounts of insurance undertakings;
(a) required by European Union law, or
(b) required by national law as regards small undertakings;
(a) an audit firm which is approved in accordance with these Regulations to carry out statutory audits, or
(b) an audit firm which is registered in accordance with Regulation 38 to carry out statutory audits;
(2) A reference in these Regulations to a registered third-country auditor or audit entity is a reference to a third-country auditor or audit entity registered under Chapter 2 of Part 11.
(3) A word or expression that is used in these Regulations and is also used in the Audit Directive shall have in these Regulations the same meaning as it has in the Audit Directive.
(4) The definition of “court” in section 2(1) of the Companies Act 2014 shall, with any necessary modifications, apply to references in these Regulations to a court as that definition applies to references to a court in that Act.
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paragraphs: In this Part, “Principal Act” means the Companies Act 2014 .
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paragraphs: Section 2 of the Principal Act is amended, in subsection (1)—
(a) in the definition of “statutory auditor”, by the substitution of “2016 Audits Regulations, and includes a firm registered in accordance with Regulation 38 of those Regulations” for “European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 ( S.I. No. 220 of 2010 )”, and
(b) by the insertion of the following definition:
“‘2016 Audits Regulations’ means the European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No 537/2014) Regulations 2016 (S.I. No. [-] of 2016);”.
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paragraphs: Section 35 of the Principal Act is amended by the substitution of the following subsection for subsection (7):
“(7) An electronic filing agent shall not, by virtue of his or her authorisation under this section to act as such, be regarded as an officer or servant of the company concerned for the purposes of Regulation 93(2) or (3) of the 2016 Audits Regulations.”.
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paragraphs: Section 322 of the Principal Act is amended, in subsection (4), by the substitution of “2016 Audits Regulations” for “European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 ( S.I. No. 220 of 2010 )”.
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paragraphs: Section 336 of the Principal Act is amended—
(a) by the substitution of the following subsection for subsection (2):
“(2) The statutory auditors’ report shall be in writing and shall—
(a) include an introduction identifying the entity financial statements, and where appropriate, the group financial statements, that are the subject of the audit and the financial reporting framework that has been applied in their preparation,
(b) include a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted, and
(c) identify the place of establishment of the statutory auditors who made the report.”,
(b) by the substitution of the following subsection for subsection (5):
“(5) The statutory auditors’ report shall—
(a) state whether, in their opinion, based on the work undertaken in the course of the audit—
(i) the information given in the directors’ report for the financial year for which statutory financial statements are prepared is consistent with the company’s statutory financial statements in respect of the financial year concerned, and
(ii) the directors’ report has been prepared in accordance with applicable legal requirements,
and
(b) state whether, based on their knowledge and understanding of the company and its environment obtained in the course of the audit, they have identified material misstatements in the directors’ report and, where they have so identified such misstatements, give an indication of the nature of each of such misstatements.”,
(c) by the insertion of the following subsection after subsection (5):
“(5A) The statutory auditors’ report shall provide a statement on any material uncertainty relating to events or conditions that may cast significant doubt about the entity’s ability to continue as a going concern.”,
(d) by the insertion of the following subsection after subsection (9):
“(9A)(a) Subject to paragraph (b), where the statutory audit was carried out by more than one statutory auditor, the statutory auditors shall agree on the results of the statutory audit and submit a joint report and opinion.
(b) In the case of disagreement, each statutory auditor shall submit his, her or its opinion in a separate paragraph of the audit report and shall state his, her or its reason for such disagreement.”.
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paragraphs: Section 337 of the Principal Act is amended by the substitution of the following subsection for subsection (2):
“(2) Where the auditor is—
(a) a statutory auditor (within the meaning of the 2016 Audits Regulations), the report shall be signed by the statutory auditor (or, where more than one, each statutory auditor), or
(b) a statutory audit firm (within the meaning of the 2016 Audits Regulations), the report shall be signed by—
(i) the statutory auditor (or, where more than one, each statutory auditor) designated by the statutory audit firm for the particular audit engagement as being primarily responsible for carrying out the statutory audit on behalf of the audit firm,
(ii) in the case of a group audit, at least the statutory auditor (or, where more than one, each statutory auditor) designated by the statutory audit firm as being primarily responsible for carrying out the statutory audit at the level of the group,
(iii) where more than one statutory audit firm has been simultaneously engaged, by the statutory auditors designated by the statutory audit firms for the particular audit engagement as being primarily responsible for carrying out the statutory audit on behalf of the audit firm, or
(iv) in the case of a group audit, where more than one statutory audit firm has been simultaneously engaged, by the statutory auditors designated by the statutory audit firms for the particular audit engagement as being primarily responsible for carrying out the statutory audit at the level of the group,
in his or her own name, for and on behalf of the audit firm.”.
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paragraphs: Section 380 of the Principal Act is amended, in subsection (5), by the substitution of the following paragraph for paragraph (iii):
“(iii) the person’s becoming disqualified from holding office by virtue of the 2016 Audits Regulations.”.
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paragraphs: Section 390 of the Principal Act is amended by the substitution of “2016 Audits Regulations” for “European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 ( S.I. No. 220 of 2010 )”.
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paragraphs: Section 394 of the Principal Act is amended, in paragraph (a), by the substitution of “2016 Audits Regulations” for “European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 ( S.I. No. 220 of 2010 )”.
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paragraphs: Section 900 of the Principal Act is amended—
(a) in subsection (1)—
(i) by the deletion of the definition of “2010 Audits Regulations”,
(ii) in the definition of “recognised accountancy body”, by the substitution of “2016 Audits Regulations” for “2010 Audits Regulations”, and
(iii) by the insertion of the following definition:
“‘CEAOB’ has the meaning assigned to it by section 905(3)(c);”,
(b) by the insertion of the following subsection after subsection (2):
“(3) Regulation 4 (except the definitions of ‘standards’ and ‘statutory auditor’) of the 2016 Audits Regulations shall apply to the interpretation of this Chapter as that Regulation applies to the interpretation of those Regulations.”.
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paragraphs: Section 904 of the Principal Act is amended, in subsection (1)—
(a) in paragraph (c), by the substitution of “IAS Regulation,” for “IAS Regulation, and”,
(b) in paragraph (d), by the substitution of “matters, and” for “matters.”, and
(c) by the insertion of the following paragraph after paragraph (d):
“(e) oversee statutory auditors and the conduct of statutory audits in accordance with the 2016 Audits Regulations and Regulation (EU) No 537/2014 and perform functions under those Regulations and that Regulation.”.
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paragraphs: Section 905 of the Principal Act is amended—
(a) in subsection (2)—
(i) by the substitution of the following paragraph for paragraph (a):
“(a) grant recognition to bodies of accountants for the purposes of the 2016 Audits Regulations, Regulation (EU) No 537/2014 and section 1441,”,
(ii) by the substitution of the following paragraphs for paragraph (i):
“(i) monitor the effectiveness of provisions of the 2016 Audits Regulations and Regulation (EU) No 537/2014 relating to the independence of statutory auditors,
(ia) monitor developments in the market for audit services to public-interest entities as required by Regulation (EU) No 537/2014,”,
(iii) by the substitution of the following paragraphs for paragraph (n):
“(ma) adopt auditing standards for the purposes of the 2016 Audits Regulations and Regulation (EU) No 537/2014,
(n) oversee, in accordance with the 2016 Audits Regulations and Regulation (EU) No 537/2014, the performance of (and, where permitted by those Regulations, that Regulation or this Act, perform) the following functions with respect to statutory auditors:
(i) the approval and registration of statutory auditors (including the registration of Member State audit firms);
(ii) continuing education;
(iii) quality assurance systems;
(iv) investigative and administrative disciplinary systems,”,
(b) by the insertion of the following subsections after subsection (2):
“(3) The Supervisory Authority shall—
(a) cooperate with competent authorities in other Member States to achieve the convergence of the educational qualifications required for the approval of an individual as a statutory auditor,
(b) when engaging in such operation, take into account developments in auditing and the audit profession and, in particular, convergence that has already been achieved by the profession, and
(c) cooperate with the Committee of European Auditing Oversight Bodies (in this Chapter referred to as ‘CEAOB’) established under Article 30 of Regulation (EU) No 537/2014 and the competent authorities referred to in Article 20 of that Regulation in so far as such convergence relates to the statutory audit of public-interest entities.
(4) The Supervisory Authority shall—
(a) cooperate within the framework of the CEAOB with a view to achieving the convergence of the requirements of the aptitude test,
(b) enhance the transparency and predictability of those requirements, and
(c) cooperate with the CEAOB and with the competent authorities referred to in Article 20 of Regulation (EU) No 537/2014 in so far as such convergence relates to statutory audits of public-interest entities.
(5) With regard to the cooperation that the State is required to engage in by virtue of Article 33 of the Audit Directive, the Supervisory Authority is assigned responsibility in that behalf.
(6) For the purpose of discharging the responsibility referred to in subsection (5), the Supervisory Authority shall put in place appropriate mechanisms, including arrangements with competent authorities in other Member States.”.
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paragraphs: Section 906 of the Principal Act is amended—
(a) in subsection (3), by the insertion of “(including its functions under Regulation (EU) No 537/2014)” after “its functions”, and
(b) in subsection (5)—
(i) in paragraph (a), by the substitution of “Chapter),” for “Chapter), or”,
(ii) in paragraph (b), by the substitution of “section 905(2)(m),” for “section 905(2)(m).”, and
(iii) by the insertion of the following paragraphs after paragraph (b):
“(c) provisions of the 2016 Audits Regulations or Regulation (EU) No 537/2014, or
(d) rules adopted by the Supervisory Authority under subsection (3) concerning matters that relate to its functions under section 905(2)(n).”.
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paragraphs: Section 907 of the Principal Act is amended—
(a) in subsection (2), by the insertion of “subsections (2A) and (2B) and” after “Subject to”, and
(b) by the insertion of the following subsections after subsection (2):