The Companies Act 2014 sets out the framework for the oversight of the accountancy and auditing profession in Ireland. The Irish Auditing and Accounting Supervisory Authority (IAASA) is an independent body responsible for the supervision of the auditing and accounting profession and its objects, functions and powers are set out in the 2014 Act.
IAASA’s mission is to contribute to Ireland having a strong regulatory environment in which to do business by supervising and promoting high quality financial reporting, auditing and effective regulation of the accounting profession in the public interest.
In relation to accountancy, IAASA is responsible for the supervision of the prescribed accountancy bodies in respect of how these bodies regulate and monitor their members including on investigations and disciplinary matters. There are eight of these bodies currently.
In relation to auditing, IAASA is designated as the single competent authority with responsibility for the oversight of statutory auditors and audit firms in accordance with the EU Audit Directive (2006/43/EC as amended by Directive 2014/56/EU) and Regulation (EU) 537/2014. The oversight tasks in respect of statutory auditors are:
- the approval of accountants to act as statutory auditors and public registration;
- the adoption of standards on professional ethics, internal quality control of audit firms and auditing;
- continuing education of auditors;
- quality assurance of audits; and
- investigation and administrative disciplinary systems.
Five of the prescribed accountancy bodies are recognised by IAASA for the purposes of carrying out oversight tasks of the approval and registration of statutory auditors and audit firms; continuing education; quality assurance systems; investigative and administrative disciplinary systems in respect of statutory auditors and audit firms. These are the recognised accountancy bodies.
Under the Audit Regulation, IAASA has direct responsibility for the quality assurance of audits of public-interest entities. Public-interest entities are systemically important entities such as credit institutions and insurance undertakings. Entities with securities listed on a regulated main market in the EU are also classified as public-interest entities. IAASA is also responsible for any investigations or sanctions arising, as a result of those quality assurance inspections, including fines.
By the end of 2018 IAASA had carried out inspections in each of the nine audit firms that carry out statutory audits of PIEs and accordingly fall under its remit under the above Regulation. Arising from these inspections, IAASA commenced its first such investigation in 2018, which is ongoing.
IAASA can impose fines on individual firms, however, no penalties have been imposed to date in respect of investigations brought against auditing and accountancy firms.
IAASA also has discretionary powers under the 2014 Act including to enquire how a prescribed accountancy body has carried out its investigation and disciplinary procedures and to enquire into how a recognised accountancy body performs the audit oversight tasks.
IAASA also has responsibility for the registration and supervision of third country auditors i.e. auditors of companies incorporated in a country outside the EU that are listed on a regulated market in Ireland.
IAASA is independent in the exercise of its statutory functions and details of its activities can be found in the Authority’s annual reports which are submitted to Government and published on its website.