There is a significant body of legislation in place governing the activities of the accounting and auditing profession, arising both from national legislation in this area and through the implementation in Ireland of EU measures. The Companies (Auditing and Accounting) Act 2003 established the Irish Auditing and Accounting Supervisory Authority (IAASA), one of whose key functions is “to supervise how the prescribed accountancy bodies regulate and monitor their members” (section 8 of the Act). Since the coming into operation of the 2003 Act and the establishment of IAASA, the system for the regulation and supervision of the accountancy and auditing profession is one of regulation by the profession under independent supervision by a statutory authority. In practice, this means a person who is not satisfied that an accountant or auditor, having membership of a prescribed accountancy body, has properly discharged his or her responsibilities can lodge a complaint with the body in question, which must then apply its investigation and disciplinary procedures to the complaint.
Where these procedures have been exhausted, that person, if still not satisfied, can make a complaint to IAASA. If IAASA has reason to believe that the body’s Investigation and Disciplinary Procedures have not been complied with, it may initiate an enquiry under the provisions of section 23 of the Act. Having completed such an enquiry, if IAASA is not satisfied that the body has complied with its approved investigation and disciplinary procedures, IAASA may annul all or part of a decision of that body relating to the matter, direct the body to conduct an investigation or a fresh investigation into the matter or require that body to pay to the Supervisory Authority an amount not exceeding €125,000.
Additionally, under Section 24 of the 2003 Act, following a complaint or on its own initiative, where, in its opinion, it is appropriate or in the public interest, IAASA can undertake an investigation into a possible breach of a prescribed accountancy body’s standards by a member. If such a breach is found by IAASA, it may impose any sanction to which the member is liable under the rules of the body and an amount towards the costs incurred by it in investigating and determining the case. IAASA’s functions also include approving and requiring changes to the prescribed accountancy bodies’ constitution and by-laws, including their investigation and disciplinary procedures and standards, as well as approving any amendments to these. In addition, my Department is progressing the implementation of a system of external quality assurance in relation to the audits of public interest entities. Also, work in relation to the adoption of a draft Accounting Directive has progressed significantly at EU level, while work continues there on a draft auditing Directive and Regulation brought forward by the EU Commission in the wake of the financial crisis.
