Companies Act 2014

F551 [ Grounds for mandatory withdrawal of approval in case of statutory auditor

1479.

1479. (1) For the purposes of this section, the cases that can constitute circumstances of an auditor s good repute being seriously compromised include cases of professional misconduct or want of professional skill on the part of the auditor.

(2) Without prejudice to section 1502 and subject to subsections (4) to (6) , a recognised accountancy body shall withdraw an approval of an auditor under this Part if, but only if

(a) circumstances arise (involving acts or omissions on the part of the auditor) from which a recognised accountancy body can reasonably conclude that the auditor s good repute is seriously compromised,

(b) the auditor no longer falls within section 1470(a) , (b) or (c) , or

(c) in the case of a person who is a statutory auditor referred to in section 1471(1)

(i) the auditor no longer falls within section 1470(a) ,

(ii) the auditor is not registered as a statutory auditor in the public register, or

(iii) the auditor is not subject to the regulation of a recognised accountancy body.

(3) Unless there do not exist internal appeal procedures of a recognised accountancy body as referred to in subsection (8)(a) , references in subsections (4) to (7) to a recognised accountancy body shall be read as references to a recognised accountancy body acting through the disciplinary committee that deals with matters at first instance.

(4) Subject to subsection (7) , subsection (5) applies where, having

(a) complied with the requirements of procedural fairness in that regard, and

(b) served any notices required for that purpose or as required by its investigation and disciplinary procedures,

a recognised accountancy body is satisfied that subsection (2)(a) , (b) or (c) applies in the case of an auditor.

(5) Subject to subsection (7) , the recognised accountancy body shall serve a notice in writing on the auditor stating that

(a) it is satisfied that subsection (2)(a) , (b) or (c) applies in the case of the auditor,

(b) the auditor shall take specified steps to cause subsection (2)(a) , (b) or (c) to cease to apply to him or her within a specified period (which shall be not less than one month), and

(c) if those steps are not taken, it shall withdraw the approval of the auditor.

(6) Where the recognised accountancy body has served a notice under subsection (5) on a statutory auditor and the auditor has not, before the expiration of the specified period referred to in subsection (5)(b) , taken the steps referred to in subsection (5)(b) , the recognised accountancy body shall withdraw the approval of the auditor under this Part.

(7) The procedure specified in subsection (5) need not be employed if the acts or omissions concerned referred to in subsection (2)(a) are such as, in the opinion of the recognised accountancy body, constitute professional misconduct or want of professional skill on the part of the auditor of a degree that employing that procedure would not be in the public interest but nothing in this subsection affects the application of the requirements of procedural fairness to the withdrawal of approval.

(8) If

(a) there exist applicable internal appeal procedures of the recognised accountancy body, and

(b) the investigation and disciplinary procedures of the recognised accountancy body provide that a decision of its disciplinary committee, being a decision of a nature to which this section applies, shall stand suspended or shall not take effect until, as the case may be

(i) the period for making an appeal under those procedures has expired without such an appeal having been made,

(ii) such an appeal has been made and the decision to withdraw the approval confirmed, or

(iii) such an appeal that has been made is withdrawn,

then, notwithstanding anything in the preceding provisions of this section, the operation of the withdrawal of approval by that disciplinary committee shall stand suspended until the occurrence of an event specified in paragraph (b)(i) , (ii) or (iii) .

(9) Subsection (10) applies if

(a) there exist applicable internal appeal procedures of the recognised accountancy body, and

(b) the investigation and disciplinary procedures of the recognised accountancy body do not provide, as referred to in subsection (8) (b), for the decision of the disciplinary committee referred to in that provision to stand suspended or not to take effect.

(10) Notwithstanding the internal appeal procedures referred to in subsection (9)(a) , the auditor to whom the decision referred to in subsection (8)(b) relates may apply to the High Court for an order suspending the operation of the withdrawal pending the determination by the relevant appellate committee of an appeal that he or she is making under those procedures and, where such an application is made, subsections (13) to (15) apply to that application with

(a) the substitution of references to an appeal under those internal appeal procedures for reference to an appeal under section 1481 , and

(b) any other necessary modifications.

(11) If the relevant appellate committee referred to in subsection (10) is of the opinion, having regard to the particular issues that have arisen on that appeal, that, in the interests of justice, the disposal by it of an appeal referred to in that subsection ought to include its proceeding in the manner specified in subsections (5) and (6) , then, in disposing of that appeal, it shall proceed in the manner so specified.

(12) The recognised accountancy body shall take all reasonable steps to ensure that any appeal to the relevant appellate committee referred to in subsection (10) is prosecuted promptly and it shall be the duty of that appellate committee to ensure that any such appeal to it is disposed of as expeditiously as may be and, for that purpose, to take all such steps as are open to it to ensure that, in so far as is practicable, there are no avoidable delays at any stage in the determination of such an appeal.

(13) Where the recognised accountancy body has made a decision to withdraw the approval of an auditor under this Part (that is to say, a final decision of the recognised accountancy body on the matter after the internal appeal procedures (if any) of it have been employed and exhausted), the auditor may apply to the High Court for an order suspending the operation of the withdrawal pending the determination by the High Court of an appeal under section 1481 that he or she is making against the withdrawal.

(14) On the hearing of an application under subsection (13) , the High Court may, as it considers appropriate and having heard the recognised accountancy body and, if it wishes to be so heard, the Supervisory Authority (which shall have standing to appear and be heard on the application)

(a) grant an order suspending the operation of the withdrawal, or

(b) refuse to grant such an order,

and an order under paragraph (a) may provide that the order shall not have effect unless one or more conditions specified in the order are complied with (and such conditions may include conditions requiring the auditor not to carry out statutory audits save under the supervision of another statutory auditor or not to carry out such audits save in specified circumstances).

(15) The High Court may, on application to it by the auditor or the recognised accountancy body concerned, vary or discharge an order under subsection (14)(a) if it considers it just to do so.

(16) The procedures under this section are in addition to those procedures in the cases to which section 930C(10) to (12) apply, that are required by section 930C(10) to (12) to be employed. ]

Annotations

Amendments:

F551

Inserted (21.09.2018) by Companies (Statutory Audits) Act 2018 (22/2018), s. 51, S.I. No. 366 of 2018.