1646. (1) Without prejudice to section 1499 and subject to subsection (2), each recognised accountancy body shall, in respect of those auditors and audit firms in relation to whom, by virtue of section 930C, it may perform functions, institute arrangements to ensure that there are effective systems of investigations and penalties to detect, correct and prevent the inadequate execution of the assurance of sustainability reporting by those statutory auditors and audit firms.

(2) Subsection (1) shall not be construed to empower a recognised accountancy body referred to in that subsection to impose a penalty on a statutory auditor or audit firm of a public-interest entity in the case of a relevant contravention committed by that auditor or audit firm that relates (whether in whole or in part) to that entity.

(3) For the purposes of this section, sections 1500, 1501 and 1502, and Chapter 9 of Part 27, shall apply subject to the following modifications:

(a) a reference to the carrying out of a statutory audit (howsoever expressed) shall be construed as reference to the carrying out of the assurance of sustainability reporting;

(b) the penalties referred to in section 1501, provision for which shall be made by the means referred to in that section, shall, where appropriate, include withdrawal of approval under this Part or, if applicable, withdrawal of a registration under section 1633 and a temporary prohibition referred to in point (ca) of Article 30a(1) of the Audit Directive and a declaration referred to in point (da) of that Article;

(c) the following shall be substituted for paragraphs (d) and (e) of section 1506(1):

“(d) a declaration by the Supervisory Authority that the assurance report concerned does not meet the requirements of Chapter 4 of Part 28;

(e) a direction by the Supervisory Authority to the specified person (being any one or more of a statutory auditor or key sustainability partner) prohibiting him or her, for the period specified in the direction (which may be up to and including an indefinite period), from carrying out the assurance of sustainability reporting or signing assurance reports, or both;”;

(d) any other necessary modifications.]