IAASA & Auditors

The Companies (Statutory Audits) Act 2018

Amendment of section 930 of Principal Act

26. Section 930 of the Principal Act is amended—

(a) by the substitution of the following subsections for subsection (1):

“(1) Subject to subsection (1A), the Supervisory Authority may grant recognition in writing to a body of accountants for the purposes of the relevant provisions but may only grant such recognition if satisfied—

(a) that the standards relating to training, qualifications and repute required by that body for the approval of a person as a statutory auditor are not less than those specified in Articles 4, 6 to 8 and 10 of the Audit Directive,

(b) as to the standards that body applies to its members in the area of ethics, codes of conduct and practice, independence, professional integrity, auditing and accounting standards, quality assurance, continuing education and investigation and disciplinary procedures,

(c) as to the capacity of the body to institute and apply effective arrangements to ensure compliance with, and the enforcement of, the standards referred to in paragraphs (a) and (b) in relation to its members having regard to the body’s ongoing performance, financial soundness, staffing and other relevant resources of the body, and

(d) that the body will effectively perform the Part 27 functions concerned (which may be all of them).

(1A) Subject to sections 931 and 931B, a recognised accountancy body shall not perform a Part 27 function unless the body’s recognition under this section states that the body may perform that function.”,

(b) in subsection (2), by the substitution of “the relevant provisions and, subject to sections 931 and 931B, for such recognition to have stated that each such body may perform each of the Part 27 functions” for “the 2016 Audits Regulations and section 1441”, and

(c) by the insertion of the following subsections after subsection (2):

“(3) A body of accountants granted recognition under subsection (1) or (2) shall continue to satisfy the Supervisory Authority as referred to in subsection (1) for the duration of such recognition.

(4) A body granted recognition under subsection (1) or (2) may make a request in writing to the Supervisory Authority for the Authority to revoke its recognition under section 931.”.

Amendment of Principal Act – insertion of sections 930A to 930D

27. The Principal Act is amended by the insertion of the following sections after section 930:

“Designation of competent authority

930A. (1) Subject to subsection (2), the Supervisory Authority is designated as the competent authority for the oversight of statutory auditors in accordance with the Audit Directive and Regulation (EU) No 537/2014.

(2) Subject to subsection (4), the Director is designated as the competent authority for the purpose of imposing relevant sanctions (within the meaning of section 957AA) on relevant directors.

(3) The Supervisory Authority is designated as the competent authority for the purposes of public oversight, quality assurance (if applicable), investigations and penalties of third-country auditors and third-country audit entities (within the meaning of Part 27) registered under section 1573(1).

(4) (a) Subject to paragraph (b), to the extent that the Director is a competent authority by virtue of subsection (2), a reference in this Chapter (other than this section) and Part 27 to the Supervisory Authority shall include a reference to the Director.

(b) The Supervisory Authority shall perform the functions under this Chapter and Part 27 that would, but for this subsection, otherwise fall to be performed by the Director by virtue of subsection (2).

(c) The Director shall cooperate with the Supervisory Authority so as to enable the Supervisory Authority to perform the functions referred to in paragraph (b).

(5) The Supervisory Authority shall, as soon as is practicable on or after the commencement of section 27 of the Companies (Statutory Audits) Act 2018, publish on its website information on the designation of competent authorities effected by this section between the Supervisory Authority and the Director.

Annual audit programme and activity report

930B. (1) The Supervisory Authority shall, not later than 6 months after the end of each financial year, prepare a report (in this Act referred to as the ‘annual audit programme and activity report’ or ‘AAPA report’) in accordance with this section on, amongst others, its oversight functions referred to in section 930A performed during that year.

(2) The AAPA report shall contain the following information:

(a) an activity report on the functions performed by the recognised accountancy bodies during the financial year to which the AAPA report relates;

(b) a work programme concerning the oversight functions referred to in section 930A that the Supervisory Authority proposes to perform during the financial year immediately following the financial year to which the AAPA report relates;

(c) an activity report regarding the functions of the Supervisory Authority under Regulation (EU) No 537/2014 during the financial year to which the AAPA report relates;

(d) a work programme regarding the functions of the Supervisory Authority under Regulation (EU) No 537/2014 that the Supervisory Authority proposes to perform during the financial year immediately following the financial year to which the AAPA report relates;

(e) a report for the financial year to which the AAPA report relates on the overall results of the quality assurance system required by section 1494(1), including—

(i) information on recommendations issued, follow-up on the recommendations, supervisory measures taken and relevant sanctions (including relevant sanctions within the meaning of section 957AA) and public notices of relevant sanctions imposed (including public notices of relevant sanctions imposed within the meaning of section 957AA), and

(ii) quantitative information and other key performance information on financial resources and staffing, and the efficiency and effectiveness of the quality assurance system.

(3) The Supervisory Authority shall cause the AAPA report to be published on its website not later than 6 months after the end of the financial year to which the report relates.

Operation of certain provisions with regard to particular recognised accountancy bodies

930C. (1) Section 1461 applies to the interpretation of this section as it applies to the interpretation of Part 27.

(2) This section applies where the provision referred to in subsection (3), (4), (5) or (6) uses the expression ‘recognised accountancy body’ without qualification and that provision does not, by its express terms, itself indicate which recognised accountancy body is being referred to.

(3) A provision of the relevant provisions that confers a function on a recognised accountancy body in relation to a statutory auditor or audit firm shall be read as conferring that function—

(a) in the case of a statutory auditor who is not a member of a statutory audit firm, on the recognised accountancy body of which the statutory auditor is a member,

(b) in the case of a statutory auditor who is a member of a statutory audit firm, on the recognised accountancy body of which the statutory audit firm is a member, and

(c) in the case of a statutory audit firm, on the recognised accountancy body of which the statutory audit firm is a member.

(4) With regard to the function conferred by section 1464 on a recognised accountancy body in relation to an individual or firm, subsection (3) applies as if, for each reference in that subsection to a statutory auditor or audit firm, as the case may be, there were substituted a reference to the individual or firm, as appropriate.

(5) A provision of the relevant provisions requiring that an act is to be done, or enabling an act to be done, by a person (other than a person referred to in subsection (6)(b)) in relation to a recognised accountancy body shall be read as requiring or enabling it to be done by the person in relation to—

(a) if the person is not a member of a statutory audit firm, the recognised accountancy body of which the person is a member,

(b) if the person is a member of a statutory audit firm, the recognised accountancy body of which the statutory audit firm is a member, and

(c) if the person is a statutory audit firm, the recognised accountancy body of which the statutory audit firm is a member.

(6) Subsection (7) applies in the case—

(a) of a provision of the kind referred to in subsection (3), (4) or (5), and

(b) where the provision falls to be applied to a Member State auditor, a Member State audit firm, a third-country auditor (within the meaning of Part 27) or any other person who is not a member of a recognised accountancy body (or, as the case may be, the firm of which the person is a member is not a member of a recognised accountancy body).

(7) The recognised accountancy body that shall perform the function concerned or, as the case may be, in relation to which the act concerned is required or enabled to be done shall be determined—

(a) by reference to arrangements in writing entered into by the recognised accountancy bodies amongst themselves for the purpose (which arrangements those bodies are empowered by this subsection to enter into), or

(b) in default of—

(i) such arrangements being entered into, or

(ii) the provision of such arrangements dealing with the particular case falling to be determined,

by the Supervisory Authority.

(8) On a determination being made by the Supervisory Authority for the purposes of subsection (7)(b), a direction in writing, reflecting the terms of the determination, shall be given by it (which direction the Supervisory Authority is empowered by this subsection to give).

(9) Arrangements shall not be entered into under subsection (7)(a) by the recognised accountancy bodies save after consultation by them with the Supervisory Authority.

(10) Subject to subsection (11), if in consequence of the operation of this section, the function of withdrawal of a particular approval of a statutory auditor or audit firm falls to be discharged by a recognised accountancy body (in this section referred to as the ‘first-mentioned accountancy body’) that is different from the recognised accountancy body (in this section referred to as the ‘second-mentioned accountancy body’) that granted the approval—

(a) the first-mentioned accountancy body shall notify in writing the second-mentioned accountancy body of the proposal by it to withdraw the approval, and

(b) the second-mentioned accountancy body shall provide such assistance by way of provision of information or clarification of any matter, to the first-mentioned accountancy body, as the latter considers it may require so as to inform itself better on any issue bearing on the performance of the function of withdrawal.

(11) The procedures adopted for the purposes of subsection (10) by the first-mentioned accountancy body and the second-mentioned accountancy body shall be such as will—

(a) avoid any unnecessary delay in the performance of the function of withdrawal, and

(b) respect the requirements of procedural fairness as concerns the auditor or audit firm concerned being able to answer any part of the case made against him or her that is informed by those procedures being employed.

(12) In a case falling within subsections (10) and (11), if the approval concerned is withdrawn, the first-mentioned accountancy body, in addition to making the notifications required by section 1482 and (where it applies) section 1483, shall notify the second-mentioned accountancy body of the withdrawal of approval.

Conflicts of interest to be avoided

930D.(1) The persons to whom this subsection applies shall organise themselves in such a manner so that conflicts of interest are avoided in the performance of their respective functions under this Act.

(2) Subsection (1) applies to—

(a) the Supervisory Authority,

(b) the Director,

(c) the Registrar, and

(d) the recognised accountancy bodies.”.

Provisions in relation to recognition by Supervisory Authority under section 930

28. The Principal Act is amended by the substitution of the following section for section 931:

“931. (1) This section applies at any of the following times:

(a) at the time of the grant of a recognition under section 930 (in this section referred to as the ‘relevant recognition’) to a body of accountants (in this section referred to as the ‘body concerned’);

(b) at any time during the currency of the relevant recognition.

(2) The Supervisory Authority may give the body concerned a notice in writing (in this section referred to as a ‘section 931 notice’) providing for any, or any combination of, the following:

(a) directing the body, with regard to the relevant recognition, to take the action or actions specified in the notice regarding such matters specified in the notice as the Authority thinks necessary or expedient;

(b) attaching to the relevant recognition such terms and conditions specified in the notice as the Authority thinks necessary or expedient.

(3) The Supervisory Authority may, by a further section 931 notice given to the body concerned, amend, replace or revoke one or more than one earlier section 931 notice given to the body.

(4) The Supervisory Authority may, by notice in writing given to the body concerned, revoke, or suspend for a period specified in the notice, the relevant recognition if—

(a) the Supervisory Authority ceases to be satisfied as referred to in section 930(1), or

(b) the body fails to comply with any of the provisions of a section 931 notice.

(5) Without prejudice to the generality of subsection (2), a section 931 notice may—

(a) direct the body concerned (including a body referred to in section 930(2)) to cease, or again cease, performing the Part 27 function specified in the notice, either (as specified in the notice) in all cases or in a particular case, on and from the date, or the occurrence of the event, specified in that notice,

(b) direct the body concerned to commence, or again commence, performing the Part 27 function specified in the notice, either (as specified in the notice) in all cases or in a particular case, on and from the date, or the occurrence of the event, specified in that notice (and notwithstanding any case where the body’s recognition under section 930 does not otherwise permit it to perform that function), or

(c) attach terms and conditions to the relevant recognition that relate to the performance by the body concerned of a Part 27 function, either (as specified in the notice) in all cases or in a particular case.

(6) (a) Subject to paragraph (b), the Supervisory Authority shall not give a section 931 notice, or a notice under subsection (4), to the body concerned unless, in the interests of procedural fairness, it has first—

(i) given the body a notice in writing stating the nature of the notice that it is minded to give the body and the reasons why it is so minded, and

(ii) given the body a reasonable opportunity, in the circumstances concerned, to make representations in writing to the Supervisory Authority on what is stated in the notice referred to in subparagraph (i).

(b) Paragraph (a) shall not apply in any case where a section 931 notice is giving effect to a request referred to in section 930(4).

(7) The Supervisory Authority may publish information on its website regarding—

(a) a section 931 notice given to the body concerned and the body’s response (if any) thereto, or

(b) a notice under subsection (4) given to the body concerned and the body’s response (if any) thereto.

(8) Where a disciplinary committee of the body concerned has reasonable grounds for believing that a category 1 or 2 offence may have been committed by a person while the person was a member of the body, the body shall, as soon as is practicable, provide a report to the Director giving details of the alleged offence and shall furnish the Director with such further information in relation to the matter as the Director may require.

(9) Where the body concerned fails to comply with subsection (8) or a requirement of the Director under that subsection, the body, and any officer of that body to whom the failure is attributable, shall be guilty of a category 3 offence.

(10) Any terms and conditions which were, immediately before the commencement of section 28 of the Companies (Statutory Audits) Act 2018, attached under this section as in force immediately before that commencement to the relevant recognition of the body concerned shall, on and from that commencement, be deemed to be terms and conditions attached to that recognition by virtue of a section 931 notice, and section 906(4)(d) and the other provisions of this section (including subsection (3)) shall be read accordingly.”.

Amendment of section 931A of Principal Act

29. Section 931A of the Principal Act is amended, in subsection (1), by the substitution of the following definition for the definition of “relevant person”:

“ ‘relevant person’, in relation to an investigation of a member or former member of a prescribed accountancy body, means—

(a) that member or any other member or former member of the prescribed accountancy body,

(b) a client or former client of the member,

(c) if the client or former client is a body corporate, a person who is or was an officer, employee or agent of the client or former client,

(d) the prescribed accountancy body or a person who is or was an officer, employee or agent of that body,

(e) if the member is an individual, a person who is or was an employee or agent of the member,

(f) if the member is a firm, a person who is or was an officer, member, partner, employee or agent of the firm, or

(g) any person whom the prescribed accountancy body reasonably believes has information or documents relating to the investigation other than information or documents the disclosure of which is prohibited or restricted by law.”.

Provisions that apply when recognised accountancy body is not able to perform Part 27 function

30. The Principal Act is amended by the insertion of the following section after section 931A:

“931B. (1) In this section—

‘recognised accountancy body A’ means a recognised accountancy body which is not able to perform, either in all cases or in a particular case, one or more than one Part 27 function by virtue of section 930(1A) or a section 931 notice;

‘recognised accountancy body B’ means a recognised accountancy body which is able to perform, in all cases, the relevant Part 27 function by virtue of its recognition under section 930 or a section 931 notice;

‘relevant members’, in relation to a relevant Part 27 function, means the statutory auditors or potential statutory auditors of recognised accountancy body A in relation to whom that body is not able to perform that function;

‘relevant Part 27 function’ means that one or more than one Part 27 function referred to in the definition of ‘recognised accountancy body A’.

(2) The following provisions shall apply in the case of the relevant Part 27 function and the relevant members:

(a) the Supervisory Authority may perform that function in relation to those members and, accordingly, the applicable provisions shall be read with any necessary modifications to take account of the fact that that function will, in relation to those members, be performed by the Supervisory Authority until such time (if any) as the Supervisory Authority gives a section 931 notice—

(i) to recognised accountancy body A to again perform that function in relation to those members, or

(ii) to recognised accountancy body B to perform that function in relation to those members until the date, or the occurrence of the event, specified in the notice;

(b) any obligations which, by virtue of the standards referred to in section 930(1)(a) and (b), the relevant members owed to recognised accountancy body A, in so far as such obligations relate to the relevant Part 27 function, are owed to the Supervisory Authority or, if the Supervisory Authority has given a section 931 notice referred to in paragraph (a) to recognised accountancy body B, to recognised accountancy body B;

(c) subject to subsection (3) and section 941(4) and (4A), the costs, as determined by the Supervisory Authority, incurred by the Supervisory Authority or recognised accountancy body B in performing the relevant Part 27 function in relation to the relevant members shall be defrayed by recognised accountancy body A or by money received by the Supervisory Authority under section 916.

(3) For the purposes of subsection (2)(c)—

(a) the Supervisory Authority may prescribe by regulations—

(i) that specified procedures and methods of calculation shall apply in the determination of the amount of costs referred to in that subsection incurred by it or recognised accountancy body B, and

(ii) requirements otherwise as to the liability of recognised accountancy body A for, and the manner in which that body shall pay, that amount,

and

(b) in default of payment of that amount to the Supervisory Authority, the Authority may recover that amount as a simple contract debt in any court of competent jurisdiction.

(4) Where the recognition granted under section 930 of a body of accountants is revoked under section 931, neither the Supervisory Authority nor a recognised accountancy body owes any obligation under this Act, in so far as this Act relates to statutory audits, to a statutory auditor who is a member of the first-mentioned body but without prejudice to any such obligation owed to that statutory auditor if the auditor is a member of another body of accountants which is recognised under section 930.

(5) Recognised accountancy body A may appeal to the court against a decision made by the Supervisory Authority under subsection (2)(c) determining an amount of costs to be paid by that body.

(6) An appeal under subsection (5) shall be brought within 3 months after the date on which recognised accountancy body A was notified by the Supervisory Authority of its decision.”.

Consultation by Supervisory Authority regarding standards and qualifications

31. The Principal Act is amended by the substitution of the following section for section 932:

“932. Before granting, renewing, withdrawing, revoking, suspending or refusing a recognition of a body of accountants under section 930 for the purposes of the relevant provisions, the Supervisory Authority may consult with any body of persons or other person as to the conditions or standards required by the body of accountants concerned in connection with membership of that body or, as the case may be, the approval of persons as statutory auditors.”.

Intervention in disciplinary process of prescribed accountancy bodies and supervision of recognised accountancy bodies

32. The Principal Act is amended by the substitution of the following section for section 933:

“933. (1) In this section—

‘approved investigation and disciplinary procedures’ means—

(a) in relation to a prescribed accountancy body that is a recognised accountancy body, the investigation and disciplinary procedures approved under—

(i) section 905(2)(c),

(ii) section 9(2)(c) of the Act of 2003, or

(iii) the Act of 1990, whether before or after the amendments of that Act that were made by section 32 of the Act of 2003,

and

(b) in relation to any other prescribed accountancy body, the investigation and disciplinary procedures approved under—

(i) section 905(2)(c), or

(ii) section 9(2)(c) of the Act of 2003;

‘relevant body’ means—

(a) in relation to an enquiry referred to in subsection (2), the prescribed accountancy body the subject of the enquiry, and

(b) in relation to an enquiry referred to in subsection (3), the recognised accountancy body the subject of the enquiry.

(2) Following a complaint or on its own initiative, the Supervisory Authority may, for the purpose of determining whether a prescribed accountancy body has complied with the approved investigation and disciplinary procedures, enquire into—

(a) a decision by that body not to undertake an investigation into a possible breach of its standards by a member,

(b) the conduct of an investigation by that body into a possible breach of its standards by a member, or

(c) any other decision of that body relating to a possible breach of its standards by a member, unless the matter is or has been the subject of an investigation under section 934 relating to that member.

(3) The Supervisory Authority may, for the purpose of determining whether a recognised accountancy body has complied with the applicable provisions in performing a Part 27 function, enquire into the performance by the body of that function (including, where applicable, enquire into the conduct by that body of an investigation into the conduct of a member of that body).

(4) For the purposes of an enquiry under this section, the Supervisory Authority may—

(a) inspect and make copies of all relevant documents in the possession or control of the relevant body,

(b) if the relevant body falls within paragraph (a) of the definition of ‘relevant body’, require the body to explain why it reached a decision referred to in subsection (2)(a) or (c) or explain how it conducted its investigation, or

(c) if the relevant body falls within paragraph (b) of the definition of ‘relevant body’, require the body to explain how it complied (if it in fact did comply) with the applicable provisions in performing the Part 27 function concerned (and, also, to explain how it conducted an investigation referred to in subsection (3) if the conduct of that investigation is, in the opinion of the Supervisory Authority, relevant to the enquiry).

(5) If at any time before completing an enquiry under this section into a matter relating to a member of a relevant body, the Supervisory Authority forms the opinion that it is appropriate or in the public interest that a matter be investigated under section 934 as regards a possible relevant contravention committed by a specified person, the Authority may apply to the court for permission to investigate the matter under that section.

(6) (a) Paragraph (b) applies if the Supervisory Authority is not satisfied, after completing the enquiry—

(i) if the relevant body falls within paragraph (a) of the definition of ‘relevant body’, that the body complied with the approved investigation and disciplinary procedures, or

(ii) if the relevant body falls within paragraph (b) of the definition of ‘relevant body’, that the body complied with the applicable provisions in performing the Part 27 function.

(b) Subject to section 941(4) and (4A), the Supervisory Authority may advise, or admonish, the relevant body or may censure it by doing one or more of the following:

(i) annulling all or part of a decision of that body relating to the matter that was the subject of the enquiry;

(ii) directing that body to conduct an investigation or a fresh investigation into the matter;

(iii) directing that body to perform the function that was the subject of the enquiry again in accordance with any directions or terms and conditions that the Supervisory Authority considers appropriate;

(iv) directing that body, where it in future performs the function that was the subject of the enquiry, to do so in accordance with any directions or terms and conditions that the Supervisory Authority considers appropriate;

(v) requiring that body to pay to the Supervisory Authority an amount not exceeding the greater of the following:

(I) €125,000;

(II) the amount prescribed under section 943(1)(e).

(c) In default of payment of an amount referred to in paragraph (b)(v), the Supervisory Authority may recover that amount as a simple contract debt in any court of competent jurisdiction.

(7) Subject to subsection (14) and section 941(4) and (4A), where, as referred to in subsection (5), the Supervisory Authority is not satisfied as referred to in subsection (6), the relevant body concerned is, in addition to any liability or obligation to pay an amount or do a thing by virtue of subsection (6), liable to pay the amount specified by the Supervisory Authority towards its costs in conducting the enquiry under this section.

(8) Where the Supervisory Authority applies under subsection (5) to the court for permission to investigate, under section 934, any matter relating to a member of a relevant body or decides to direct under subsection (6)(b)(ii) a relevant body to conduct an investigation or fresh investigation into any matter, the following rules apply:

(a) in the case of an application to the court to investigate a matter, any decision of that body relating to the matter is suspended if and as soon as the body is notified by the Supervisory Authority that permission has been granted under section 941(3);

(b) in the case of a direction to conduct an investigation or a fresh investigation, any decision of that body relating to the matter is suspended if and as soon as the body is notified by the Supervisory Authority that the direction has been confirmed as referred to in section 941(4A).

(9) The Supervisory Authority may publish on its website each decision made under subsection (6) or each decision made specifying an amount under subsection (7) and the reasons for the decision after giving the relevant body and the member (if any) thereof concerned not less than 3 months notice in writing of its intention to do so.

(10) The relevant body or the member thereof (if any) concerned may appeal to the court against a decision made by the Supervisory Authority under subsection (6) (which may be the decision under subsection (6)(a) or the decision under subsection (6)(b), or both) or a decision made by it specifying an amount under subsection (7).

(11) An appeal under subsection (10) shall be brought within 3 months after the date on which, as appropriate, the relevant body or the member thereof (if any) concerned was notified by the Supervisory Authority of its decision.

(12) If the Supervisory Authority is not satisfied that a relevant body has, when undertaking an investigation or fresh investigation into any matter as required by a direction under subsection (6)(b)(ii)—

(a) if the relevant body falls within paragraph (a) of the definition of ‘relevant body’, complied with the approved investigation and disciplinary procedures, or

(b) if the relevant body falls within paragraph (b) of the definition of ‘relevant body’, complied with the applicable provisions in performing the Part 27 function,

the Supervisory Authority may appeal to the court against any decision of the relevant body relating to the matter.

(13) An appeal under subsection (12) shall be brought within 3 months after the date on which the Supervisory Authority was notified by the relevant body of its decision.

(14) For the purpose of subsection (7)—

(a) the Supervisory Authority may prescribe by regulations—

(i) that specified procedures and methods of calculation shall apply in the determination of the amount of costs referred to in that subsection incurred by it, and

(ii) requirements otherwise as to the liability of the relevant body for, and the manner in which that body shall pay, that amount,

and

(b) in default of payment of that amount to the Supervisory Authority, the Authority may recover that amount as a simple contract debt in any court of competent jurisdiction.

(15) Nothing in this section shall be construed to prevent the undertaking of one enquiry under this section into 2 or more matters concerning the same body of accountants where one or more than one of such matters falls within subsection (2) and one or more than one of such matters falls within subsection (3).

(16) For the purposes of this section—

(a) any decision made or any investigation conducted by the disciplinary committee of a relevant body is considered to have been made or conducted by the relevant body, and

(b)‘member’, in addition to the meaning given to that expression by section 900(1), includes, in relation to a relevant body that is a recognised accountancy body, an individual or firm who or which, though not a member of the recognised accountancy body, is an individual or firm in relation to whom that body may perform functions under the relevant provisions.”.

Resolution of suspected non-compliance by agreement – relevant body

33. The Principal Act is amended by the insertion of the following section after section 933:

“933A. (1) Section 933(1) applies to the interpretation of this section as it applies to the interpretation of section 933.

(2) Subject to subsection (3), if the Supervisory Authority believes on reasonable grounds—

(a) if the relevant body falls within paragraph (a) of the definition of ‘relevant body’, that the body did not comply with the approved investigation and disciplinary procedures, or

(b) if the relevant body falls within paragraph (b) of the definition of ‘relevant body’, that the body did not comply with the applicable provisions in performing the Part 27 function,

the Supervisory Authority and the relevant body may, at their absolute discretion, enter into an agreement (in this section referred to as a ‘section 933A agreement’) to resolve the matters the subject of the non-compliance.

(3) The following provisions shall apply to the section 933A agreement:

(a) the agreement may be entered into notwithstanding that no enquiry under section 933 into the non-compliance has been commenced;

(b) the agreement may be entered into after an enquiry under section 933 into the non-compliance has been commenced but not, subject to paragraph (d), after it has been completed;

(c) without prejudice to the generality of the terms of the agreement, such terms may include terms under which the relevant body accepts—

(i) the imposition of one or more sanctions that may be imposed under section 933(6)(b), and

(ii) if an enquiry under section 933 into the non-compliance has been commenced, the payment of costs referred to in section 933(7);

(d) the agreement may be entered into after an enquiry under section 933 has been undertaken and carried out only to the extent to determine which sanctions (if any) referred to in paragraph (c)(i) to impose on the relevant body;

(e) the terms of the agreement are binding on the Supervisory Authority and the relevant body.

(4) Subject to subsection (5), where the relevant body with whom the Supervisory Authority has entered into the section 933A agreement fails to comply with one or more of the terms of the agreement, the Supervisory Authority may apply to the court for an order compelling that body to comply with those terms.

(5) In default of payment, any amount agreed to be paid to the Supervisory Authority by the relevant body under the section 933A agreement may be recovered by the Supervisory Authority from the body as a simple contract debt in any court of competent jurisdiction.

(6) The Supervisory Authority may, at its discretion, publish a section 933A agreement on its website.

(7) Section 941 shall be disregarded for the purposes of a section 933A agreement.”.

Investigation of possible breaches of standards of prescribed accountancy bodies or relevant contraventions by statutory auditors

34. The Principal Act is amended by the substitution of the following section for section 934:

“934. (1) In this section—

‘client’ includes an individual, a body corporate, an unincorporated body of persons and a partnership;

‘relevant person’—

(a) in relation to an investigation of a member or former member of a prescribed accountancy body, means—

(i) that member or any other member or former member of the prescribed accountancy body,

(ii) a client or former client of the member,

(iii) if the client or former client is a body corporate, a person who is or was an officer, employee or agent of the client or former client,

(iv) the prescribed accountancy body or a person who is or was an officer, employee or agent of that body,

(v) if the member is an individual, a person who is or was an employee or agent of the member,

(vi) if the member is a firm, a person who is or was an officer, member, partner, employee or agent of the firm, or

(vii) any person whom the Supervisory Authority reasonably believes has information or documents relating to the investigation other than information or documents the disclosure of which is prohibited or restricted by law,

and

(b) in relation to an investigation of a statutory auditor or former statutory auditor, means—

(i) that auditor and any other statutory auditor or former statutory auditor who is or was a member of the same recognised accountancy body as the first-mentioned statutory auditor,

(ii) a client or former client of the auditor,

(iii) if the client or former client is a body corporate, a person who is or was an officer, employee or agent of the client or former client,

(iv) the recognised accountancy body or a person who is or was an officer, employee or agent of that body,

(v) if the auditor is an individual, a person who is or was an employee or agent of the auditor,

(vi) if the auditor is or was an audit firm, a person who is or was an officer, member, partner, employee or agent of the auditor, or

(vii) any person whom the Supervisory Authority reasonably believes has information or documents relating to the investigation other than information or documents the disclosure of which is prohibited or restricted by law.

(2) (a) Subject to paragraph (b) and subsection (3), the Supervisory Authority may undertake an investigation into a possible relevant contravention committed by a specified person—

(i) following a complaint, or

(ii) on its own initiative.

(b) The Supervisory Authority shall not undertake an investigation into a possible relevant contravention committed by a specified person who falls within paragraph (a) of the definition of ‘specified person’ unless the Supervisory Authority is of the opinion that it is appropriate or in the public interest to do so.

(3) An investigation shall not be undertaken into a matter that is or has been the subject of an enquiry under section 933 relating to the specified person except with the permission of the court granted on application under section 933(5).

(4) For the purposes of an investigation under this section, the Supervisory Authority may require a relevant person to do one or more of the following:

(a) produce to the Supervisory Authority all books or documents relating to the investigation that are in the relevant person’s possession or control;

(b) attend before the Supervisory Authority;

(c) give the Supervisory Authority any other assistance in connection with the investigation that the relevant person is reasonably able to give.

(5) For the purposes of an investigation under this section, the Supervisory Authority may—

(a) examine on oath, either by word of mouth or on written interrogatories, a relevant person,

(b) administer oaths for the purposes of the examination, and

(c) record, in writing, the answers of a person so examined and require that person to sign them.

(6) The Supervisory Authority may certify the refusal or failure to the court if a relevant person refuses or fails to do one or more of the following:

(a) produce to the Supervisory Authority any book or document that it is the person’s duty under this section to produce;

(b) attend before the Supervisory Authority when required to do so under this section;

(c) answer a question put to the person by the Supervisory Authority with respect to the matter under investigation.

(7) On receiving a certificate of refusal or failure concerning a relevant person, the court may enquire into the case and after hearing any evidence that may be adduced, may do one or more of the following:

(a) direct that the relevant person attend or re-attend before the Supervisory Authority or produce particular books or documents or answer particular questions put to him or her by the Supervisory Authority;

(b) direct that the relevant person need not produce particular books or documents or answer particular questions put to him or her by the Supervisory Authority;

(c) make any other ancillary or consequential order or give any other direction that the court thinks fit.

(8) Subject to sections 934G and 941(4) and (4A), if, in the case of a specified person who falls within paragraph (a) of the definition of ‘specified person’, the Supervisory Authority finds that the person committed a relevant contravention, the Supervisory Authority may impose on the person such sanction to which the person is liable under the approved constitution and bye laws of the prescribed accountancy body of which the person is a member (including a monetary sanction) as the Supervisory Authority considers appropriate after having regard to the circumstances referred to in section 934D(2).

(9) Subject to section 941(4) and (4A), if, in the case of a specified person who falls within paragraph (b) of the definition of ‘specified person’, the Supervisory Authority finds that the person has committed a relevant contravention, the Supervisory Authority may impose such relevant sanction on the person as the Supervisory Authority considers appropriate after having regard to the circumstances referred to in section 934D(2).

(10) Subject to subsection (15) and section 941(4) and (4A), if subsection (8) or (9) applies, the costs incurred by the Supervisory Authority in investigating and determining a matter under this section (other than any costs of or incidental to an enquiry by the court under subsection (7)) shall be defrayed by, in the case of a specified person who falls within paragraph (a) of the definition of ‘specified person’, the prescribed accountancy body of which the specified person is a member and, in any other case, by the specified person.

(11) Subject to subsection (12), the specified person who is the subject of a relevant decision made by the Supervisory Authority may appeal to the court against the decision.

(12) An appeal under subsection (11) shall be brought within 3 months after the date on which the specified person concerned was notified by the Supervisory Authority of the relevant decision.

(13) The prescribed accountancy body or specified person, as appropriate, may appeal to the court against a decision made by the Supervisory Authority specifying an amount of costs under subsection (10).

(14) An appeal under subsection (13) shall be brought within 3 months after the date on which the prescribed accountancy body or specified person, as appropriate, was notified by the Supervisory Authority of the decision.

(15) For the purposes of subsection (10)—

(a) the Supervisory Authority may prescribe by regulations—

(i) that specified procedures and methods of calculation shall apply in the determination of the amount of costs so incurred by it, and

(ii) requirements otherwise as to the liability of, as appropriate, the prescribed accountancy body or specified person for, and the manner in which that body or person shall pay, that amount,

and

(b) in default of payment of that amount to the Supervisory Authority, the Authority may recover that amount as a simple contract debt in any court of competent jurisdiction.

(16) The production of any books or documents under this section by a person who claims a lien on them does not prejudice the lien.

(17) Nothing in this section shall be construed to prevent the undertaking of one investigation under this section into 2 or more possible relevant contraventions committed by the same specified person where one or more of such possible contraventions fall within paragraph (a) of the definition of ‘relevant contravention’ and one or more of such possible contraventions fall within paragraph (b) of that definition.”.

Amendment of Principal Act – insertion of sections 934A to 934I

35. The Principal Act is amended by the insertion of the following sections after section 934:

“

Supplemental provisions to section 934 – certain specified persons

934A. (1) This section applies to a specified person the subject of a decision under section 934(8) that the person has committed a relevant contravention.

(2) Where applicable, the Supervisory Authority shall direct the prescribed accountancy body of which the specified person referred to in subsection (1) is a member to take any necessary action on foot of the imposition of a relevant sanction on the person and that body shall comply with the direction.

(3) The Supervisory Authority shall, as soon as is practicable after imposing a relevant sanction on a specified person referred to in subsection (1), notify the prescribed accountancy body of which the specified person is a member of the imposition of the sanction together with such particulars of the person, the relevant contravention concerned and the sanction as the Supervisory Authority considers appropriate.

Immediate action required to protect public

934B. (1) This section applies if the Supervisory Authority is of the opinion that the nature or gravity of the possible relevant contravention committed by a specified person warrants, in the interest of protecting the public, a direction to the specified person prohibiting him or her from carrying out statutory audits or signing statutory auditors’ reports, or both, until steps or further steps are taken under section 934 in relation to that contravention by that person.

(2) The Supervisory Authority may make an ex parte application to the court for a direction referred to in subsection (1) until the steps or further steps referred to in that subsection are taken.

Sanctions which Supervisory Authority may impose on statutory auditor for relevant contravention

934C. (1) This section applies to a specified person the subject of a decision under section 934(9) that the person has committed a relevant contravention.

(2) Subject to section 934D, the Supervisory Authority may impose on the specified person one or more of the following sanctions in relation to the relevant contravention:

(a) a direction by the Supervisory Authority to the specified person that he or she cease the conduct giving rise (whether in whole or in part) to the contravention and to abstain from any repetition of that conduct;

(b) a direction by the Supervisory Authority to the specified person to remediate the conduct giving rise (whether in whole or in part) to the contravention;

(c) a reprimand or severe reprimand by the Supervisory Authority to the specified person in relation to the conduct giving rise (whether in whole or in part) to the contravention;

(d) a declaration by the Supervisory Authority that the statutory auditors’ report concerned does not meet the requirements of section 336 or 337 or, where applicable, Article 10 of Regulation (EU) No 537/2014;

(e) a direction by the Supervisory Authority to the specified person (being any one or more of a statutory auditor or key audit partner (within the meaning of Part 27)) prohibiting him or her, for the period specified in the direction (which may be up to and including an indefinite period), from carrying out statutory audits or signing statutory auditors’ reports, or both;

(f) if the specified person is an audit firm, a direction by the Supervisory Authority to the firm, or to an officer, member or partner of the firm, or to both, prohibiting the firm or, as the case may be, the officer, member or partner, for the period specified in the direction (which may be up to and including an indefinite period) from performing functions—

(i) in the case of the firm, as an audit firm, or

(ii) in the case of the officer, member or partner, in audit firms or public-interest entities;

(g) subject to section 934G, a direction by the Supervisory Authority to the specified person to pay an amount, as specified in the direction but not exceeding—

(i) €100,000 in the case of a specified person who is an individual, or

(ii) in the case of a specified person which is an audit firm, €100,000 multiplied by the number of statutory auditors in the firm at the time that the relevant contravention occurred (and irrespective of whether any particular statutory auditor was or was not a party to the relevant contravention),

to the Supervisory Authority;

(h) an order excluding the specified person from having his or her particulars entered, or continuing to be entered, in the public register (within the meaning of Part 27) in respect of one or more recognised accountancy bodies.

(3) In default of payment of an amount referred to in subsection (2)(g), the Supervisory Authority may recover that amount as a simple contract debt in any court of competent jurisdiction.

(4) A person the subject of a direction under subsection (2) shall comply with the direction.

(5) Where applicable, the Supervisory Authority shall direct the recognised accountancy body of which the specified person is a member to take any necessary action on foot of the imposition of a relevant sanction on the person and that body shall comply with the direction.

(6) The Supervisory Authority shall, as soon as is practicable after imposing a relevant sanction on a specified person, notify the recognised accountancy body of which the specified person is a member of the imposition of the sanction together with such particulars of the person, the relevant contravention concerned and the sanction as the Supervisory Authority considers appropriate.

Relevant circumstances to be considered in imposing relevant sanctions on specified person

934D. (1) This section applies to a specified person the subject of a decision under section 934(8) or (9) that the person has committed a relevant contravention.

(2) In imposing a relevant sanction on a specified person, the Supervisory Authority shall consider the following circumstances:

(a) the gravity and duration of the relevant contravention;

(b) the degree of responsibility of the specified person;

(c) the financial strength of the specified person (including, in the case of a specified person who is not an individual, the total turnover of the specified person or, in the case of a specified person who is an individual, the annual income of the individual);

(d) the amount of profits gained or losses avoided by the specified person in consequence of the relevant contravention, in so far as they can be determined;

(e) the level of cooperation of the specified person with the Supervisory Authority;

(f) previous relevant contraventions committed by the specified person.

Resolution of suspected relevant contravention by agreement – specified person

934E. (1) Subject to subsection (2), if the Supervisory Authority believes on reasonable grounds that a specified person is committing, or has committed, a relevant contravention, the Supervisory Authority and the person may, at their absolute discretion, enter into an agreement (in this section referred to as a ‘section 934E agreement’) to resolve the matters the subject of the contravention.

(2) The following provisions shall apply to the section 934E agreement:

(a) the agreement may be entered into notwithstanding that no investigation under section 934 into the contravention has been commenced;

(b) the agreement may be entered into after an investigation under section 934 into the relevant contravention has been commenced but not, subject to paragraph (d), after it has been completed;

(c) without prejudice to the generality of the terms of the agreement, such terms may include terms under which the specified person accepts—

(i) the imposition of one or more relevant sanctions that may be imposed under section 934(8) or (9), as appropriate, and

(ii) if an investigation under section 934 into the contravention has been commenced, the payment of costs referred to in section 934(10);

(d) the agreement may be entered into after an investigation under section 934 has been undertaken and carried out only to the extent to determine which sanctions (if any) referred to in paragraph (c)(i) to impose on the specified person;

(e) the terms of the agreement are binding on the Supervisory Authority and the specified person.

(3) Subject to subsection (6), the provisions of sections 934C, 934D, 934F, 934G and 934H shall apply, with any necessary modifications, to any relevant sanctions imposed on a specified person pursuant to a section 934E agreement as those sections apply to any relevant sanctions imposed on a specified person otherwise than pursuant to a section 934E agreement.

(4) Subject to subsection (5), where the specified person with whom the Supervisory Authority has entered into the section 934E agreement fails to comply with one or more of the terms of the agreement, the Supervisory Authority may apply to the court for an order compelling that person comply with those terms.

(5) In default of payment, any amount agreed to be paid to the Supervisory Authority by the specified person under the section 934E agreement may be recovered by the Supervisory Authority from the person as a simple contract debt in any court of competent jurisdiction.

(6) The necessary modifications referred to in subsection (3), in so far as section 934F is concerned, include reading that section as if—

(a) the following subsection were substituted for subsection (1) of that section:

‘(1) Subject to subsection (3), the Supervisory Authority shall, in so far as a relevant decision imposes a relevant sanction on a specified person, as soon as is practicable, publish on its website particulars of the relevant contravention for which the relevant sanction was imposed, particulars of the relevant sanction imposed and particulars of the specified person on whom the relevant sanction was imposed.’,

(b) subsections (2) and (4) of that section were deleted, and

(c) in subsection (5) of that section, the reference to ‘or (2)’ were deleted.

(7) Section 941 shall be disregarded for the purposes of a section 934E agreement.

Publication of relevant sanction imposed on specified person, etc.

934F. (1) Subject to subsections (2) and (3), the Supervisory Authority shall, in so far as a relevant decision imposes a relevant sanction on a specified person, as soon as is practicable after—

(a) that decision has been confirmed by the court as referred to in section 941(4A), or

(b) a decision of the court under section 941(2)(b) has been made to impose a different relevant sanction on the specified person,

publish on its website particulars of the relevant contravention for which the relevant sanction was imposed, particulars of the relevant sanction imposed and particulars of the specified person on whom the relevant sanction was imposed.

(2) Subject to subsection (4), if there is an appeal to the court from a confirmation referred to in subsection (1)(a), or a decision referred to in subsection (1)(b), the Supervisory Authority shall, as soon as may be, as it considers appropriate, publish particulars on its website of the status or outcome of the appeal.

(3) The Supervisory Authority shall publish the particulars, comprising a public notice of a relevant sanction imposed, on an anonymous basis on its website in any one or more of the following circumstances:

(a) the Supervisory Authority, following an assessment of the proportionality of the publication of those particulars in accordance with subsection (1) in so far as personal data are concerned, is of the opinion that, in relation to the relevant sanction imposed on a specified person who is an individual, such publication would be disproportionate;

(b) the Supervisory Authority is of the opinion that the publication of those particulars in accordance with subsection (1) would jeopardise the stability of financial markets or an ongoing criminal investigation;

(c) the Supervisory Authority is of the opinion that the publication of those particulars in accordance with subsection (1) would cause disproportionate damage to the specified person.

(4) Subsection (2) shall not apply in any case where subsection (3) applies.

(5) The Supervisory Authority shall ensure that particulars published on its website in accordance with subsection (1) or (2) remain on its website for at least 5 years.

Limitations on imposing monetary sanctions on specified person

934G. (1) If the Supervisory Authority decides to impose a monetary sanction on a specified person, the Supervisory Authority shall not impose an amount—

(a) that would be likely to cause the specified person to cease business, or

(b) that would, if the specified person is an individual, be likely to cause the person to be adjudicated bankrupt.

(2) If the conduct engaged in by the specified person has given rise (whether in whole or in part) to 2 or more relevant contraventions, the Supervisory Authority shall not impose more than one monetary sanction on the person in respect of the same conduct.

Specified person not to be liable to be penalised twice for same relevant contravention

934H. (1) If the Supervisory Authority imposes a monetary sanction on a specified person and the conduct engaged in by the person that has given rise (whether in whole or in part) to the relevant contravention is an offence under the law of the State, the person shall not be liable to be prosecuted or punished for the offence under that law.

(2) The Supervisory Authority shall not impose a monetary sanction on a specified person if—

(a) the person has been charged with having committed an offence under a law of the State and has either been found guilty or not guilty of having committed the offence, and

(b) the offence involves the conduct engaged in by the person that has given rise (whether in whole or in part) to the relevant contravention.

Reporting of relevant contraventions

934I. (1) The Supervisory Authority and each recognised accountancy body shall establish effective mechanisms to encourage the reporting to it of relevant contraventions or suspected relevant contraventions.

(2) The mechanisms referred to in subsection (1) shall include at least:

(a) specific procedures (including follow-up procedures) for the receipt of reports of relevant contraventions and suspected relevant contraventions;

(b) the protection of personal data concerning both the person who reports the relevant contravention or suspected relevant contravention and the specified person concerned in compliance with the principles laid down in the Data Protection Acts 1988 to 2018 and Regulation (EU) 2016/679.

(3) A statutory auditor which is an audit firm shall, as soon as is practicable after the commencement of section 35 of the Companies (Statutory Audits) Act 2018, establish effective procedures within the firm for employees to report relevant contraventions or suspected relevant contraventions.”.

Amendment of section 935 of Principal Act

36. Section 935 of the Principal Act is amended—

(a) in subsection (1)—

(i) in paragraph (a), by the substitution of “Part 27” for “the 2016 Audits Regulations”, and

(ii) in paragraph (b)(i), by the substitution of “that Part” for “those Regulations”,

(b) in subsection (2)—

(i) by the substitution of “section 934(8)” for “section 934(7)”,

(ii) by the substitution of “Chapters 2 to 4, or Chapter 8, of Part 27” for “Part 4 or Chapter 2 of Part 8 of the 2016 Audits Regulations”, and

(iii) by the substitution of “that Part” for “those Regulations”,

(c) by the substitution of the following subsection for subsection (3):

“(3) Where such an approval is withdrawn by the Supervisory Authority, section 1479(13) to (15) or, as the case may be, section 1480(13) to (15), shall, with all necessary modifications, apply to that withdrawal and section 934(11) and (12) shall not apply to that withdrawal.”,

(d) in subsection (4)—

(i) by the substitution of “section 934(8)” for “section 934(7)”, and

(ii) by the substitution of “Part 27” for “the 2016 Audits Regulations”,

and

(e) in subsection (5), in the definition of “member”, by the substitution of “Part 27” for “the 2016 Audits Regulations”.

Amendment of Principal Act – insertion of sections 936A and 936B

37. The Principal Act is amended by the insertion of the following sections before section 937:

“

Supplemental provisions in relation to section 934 – relevant directors

936A. (1) This section applies if—

(a) either—

(i) a specified person is the subject of a decision under section 934(9) that he or she has committed a relevant contravention, or

(ii) the Supervisory Authority and a specified person who falls within paragraph (b) of the definition of ‘specified person’ have entered into a section 934E agreement in respect of a relevant contravention that the Supervisory Authority reasonably believes that the person has committed,

and

(b) that contravention relates, whether directly or indirectly, to the audit of a public-interest entity.

(2) The Supervisory Authority shall, as soon as is practicable, give the Director particulars of—

(a) the specified person,

(b) the relevant contravention, and

(c) the public-interest entity.

(3) The Supervisory Authority shall, in addition to complying with subsection (2), give the Director such information and documents and assistance as the Director may reasonably require for the Director to decide whether or not—

(a) to investigate under Part 13 a relevant director, or

(b) to impose, under section 957B, a relevant sanction (within the meaning of section 957AA) on a relevant director for engaging in conduct giving rise (whether in whole or in part) to the relevant contravention,

or both.

Communication with the CEAOB

936B. (1) The Supervisory Authority shall immediately communicate to the CEAOB particulars of—

(a) any direction under section 934(8) that is equivalent to a direction referred to in paragraph (b),

(b) any direction given by the Authority under section 934C(2)(e) or (f), and

(c) any direction given by the Director under section 957C(2)(b).

(2) The Supervisory Authority shall, as soon as may be after the end of a year, give to the CEAOB aggregated information in relation to—

(a) all relevant sanctions imposed by it on specified persons (being specified persons who fall within paragraph (b) of the definition of ‘specified person’) during the year in accordance with this Chapter,

(b) all public notices of relevant sanctions imposed by it on specified persons (being specified persons who fall within paragraph (b) of the definition of ‘specified person’) during the year in accordance with this Chapter,

(c) all relevant sanctions (within the meaning of Chapter 9 of Part 27) imposed by it on specified persons (within the meaning of that Chapter) during the year in accordance with that Chapter,

(d) all public notices of relevant sanctions imposed (within the meaning of Chapter 9 of Part 27) by it on specified persons (within the meaning of that Chapter) during the year in accordance with that Chapter,

(e) all relevant sanctions (within the meaning of section 957AA) imposed by the Director during the year in accordance with Chapter 3, and

(f) all public notices of relevant sanctions imposed (within the meaning of section 957AA) by the Director during the year in accordance with Chapter 3.

(3) A recognised accountancy body shall immediately communicate to the Supervisory Authority particulars of any temporary prohibition referred to in point (c) or (e) of Article 30a(1) of the Audit Directive imposed by the body on a relevant person.

(4) The Supervisory Authority shall immediately communicate to the CEAOB particulars which have been communicated to it under subsection (3).

(5) Without prejudice to the generality of sections 1523 and 1556, a recognised accountancy body shall, as soon as may be after the end of a year, give to the Supervisory Authority aggregated information in relation to—

(a) all sanctions equivalent to relevant sanctions imposed by it on relevant persons during the year in accordance with Part 27, and

(b) all notices equivalent to public notices of the sanctions first-mentioned in paragraph (a) imposed by it on relevant persons during the year in accordance with Part 27.

(6) The Supervisory Authority shall, as soon as may be after it is given the information referred to in subsection (5), give the information to the CEAOB.

(7) In this section, ‘relevant person’, in relation to a recognised accountancy body, means—

(a) a member of the body, or

(b) an auditor or audit firm in relation to whom, by virtue of section 930C, the body may perform functions,

who is a statutory auditor or former statutory auditor.”.

Amendment of section 937 of Principal Act

38. Section 937 of the Principal Act is amended—

(a) in subsection (1), by the substitution of “sections 933 to 934I, 935 and 936B and Chapter 9 of Part 27” for “sections 933 to 936”, and

(b) by the insertion of the following subsection after subsection (3):

“(3A) The Supervisory Authority may delegate some or all of the functions under sections 933 to 934I, 935 and 936B and Chapter 9 of Part 27 to any of its officers or employees or any other person duly authorised by it in that behalf.”.

Amendment of section 938 of Principal Act

39. Section 938 of the Principal Act is amended—

(a) in subsection (1), by the substitution of “or 935” for “, 935 or 935B”,

(b) in subsection (3), by the substitution of “or 935” for “, 935, 935B or 936”,

(c) by the substitution of the following subsections for subsections (4) and (5):

“(4) Subject to subsection (5), the Supervisory Authority may make regulations respecting the procedures to be followed in conducting enquiries under section 933 and investigations under section 934 or 935.

(5) There is no obligation to make regulations under subsection (4) with respect to a particular provision referred to in that subsection.”,

and

(d) by the insertion of the following subsections after subsection (5):

“(6) The Supervisory Authority shall, as soon as is practicable after making any regulations under subsection (4), publish the regulations on its website.

(7) Any information produced or answer given by a person (howsoever described) in compliance with a requirement under section 933, 934 or 935 may be used in evidence against the person in any proceedings whatsoever, save proceedings for an offence (other than perjury in respect of such an answer).

(8) A finding or decision of the Supervisory Authority under section 933, 934 or 935 is not a bar to any civil or criminal proceedings against the person (howsoever described) who is the subject of the finding or decision.”.

Amendment of section 940 of Principal Act

40. Section 940 of the Principal Act is amended by the insertion of the following subsection after subsection (4):

“(5) Nothing in this section shall operate to prevent the Supervisory Authority from complying with its obligations under the relevant provisions.”.

Amendment of section 941 of Principal Act

41. Section 941 of the Principal Act is amended—

(a) in subsection (1), by the substitution of “section 931B(5), 933(10) or (12) or 934(11) or (13)” for “section 933(9) or (11), 934(10) or 935B(7)”,

(b) in subsection (3)—

(i) by the substitution of “section 933(5)” for “section 933(4)”,

(ii) by the substitution of “relevant contravention committed by a specified person” for “breach of a prescribed accountancy body’s rules by a member”, and

(iii) in paragraph (b), by the substitution of “such person” for “the member”,

(c) by the substitution of the following subsections for subsection (4):

“(4) Subsection (4A) applies to the following decisions of the Supervisory Authority:

(a) a decision under section 931B(2)(c);

(b) a decision under section 933(6) in so far as it relates to the advisement, or admonishment, or censure referred to in that section of a relevant body;

(c) a decision under section 933(7);

(d) a decision under section 934(10);

(e) a relevant decision in so far as it relates to the imposition of a relevant sanction on a specified person.

(4A) A decision to which this subsection applies does not take effect until the decision is confirmed by the court either—

(a) on appeal under section 931B(5), 933(10) or 934(11) or (13), or

(b) on application by the Supervisory Authority under subsection (5).”,

(d) in subsection (5), by the substitution of “to which subsection (4A) applies” for “referred to in subsection (4)”,

(e) in subsection (6), by the substitution of the following paragraphs for paragraphs (b) and (c):

“(b) a term or condition of recognition,

(c) an obligation or obligations referred to in that subsection,

(d) a section 931 notice, or

(e) a direction under section 934A(2) or 934C(5),”,

and

(f) by the insertion of the following subsections after subsection (6):

“(7) On an application under section 933A(4) for an order compelling compliance with a section 933A agreement, the court may make any order or give any direction as it thinks fit.

(8) On an application under section 934B(2) for a direction referred to in section 934B(1), the court may make any order or give any direction as it thinks fit.

(9) On an application under section 934E(4) for an order compelling compliance with a section 934E agreement, the court may make any order or give any direction as it thinks fit.”.

Amendment of section 942 of Principal Act

42. Section 942 of the Principal Act is amended—

(a) by the deletion of subsection (2), and

(b) in subsection (4)(b), by the substitution of “subsection (1)” for “subsections (1) and (2)”.

Amendment of section 943 of Principal Act

43. Section 943 of the Principal Act is amended, in subsection (1), by the substitution of the following paragraphs for paragraphs (e) and (f):

“(e) prescribing the amount of a penalty under section 933(6)(b)(v);

(f) prescribing for the purposes of section 933(9) the manner in which notice is to be given;”.

Amendment of section 949 of Principal Act

44. Section 949 of the Principal Act is amended by the insertion of the following subsection after subsection (1):

“(1A) Sections 930A and 930D make additional provision with regard to the performance of functions by, amongst others, the Director.”.

Amendment of Principal Act – insertion of sections 957A to 957I

45. Part 15 of the Principal Act is amended, in Chapter 3, by the insertion of the following sections before Chapter 4 of that Part:

“

Definitions (sections 957A to 957I)

957AA. In this section and sections 957B to 957I—

‘court’ means the High Court;

‘monetary sanction’, in relation to a relevant director, means the monetary sanction referred to in section 957C(2)(c);

‘public notice of relevant sanction imposed’, in relation to a relevant director, means the publication in accordance with section 957F(1) of the relevant director’s particulars referred to in that section together with the other related particulars referred to in that section;

‘relevant contravention’ has the meaning assigned to it by section 900;

‘relevant decision’, in relation to a relevant director, means—

(a) a decision under section 957B(2) that the director has engaged in conduct giving rise (whether in whole or in part) to a relevant contravention,

(b) if, in consequence of a decision referred to in paragraph (a), the Director decides under section 957B(2) to impose a relevant sanction on the relevant director, the decision to impose that sanction, or

(c) both such decisions;

‘relevant director’ has the meaning assigned to it by section 900;

‘relevant sanction’, in relation to a relevant director, means a sanction referred to in section 957C(2);

‘section 957E agreement’ shall be read in accordance with section 957E(1);

‘Supervisory Authority’ has the meaning assigned to it by section 900.

Provisions applicable where Director receives particulars, etc., from Supervisory Authority concerning relevant contravention and relevant director

957B. (1) This section applies where—

(a) the Director has received from the Supervisory Authority particulars referred to in section 936A(2) and (where applicable) information and documents and assistance referred to in section 936A(3), and

(b) in consequence thereof, the Director has investigated under Part 13 a relevant director in order to find whether or not the relevant director has engaged in conduct giving rise (whether in whole or in part) to a relevant contravention.

(2) Subject to section 957I(3) and (4), where the Director finds that a relevant director has engaged in conduct giving rise (whether in whole or in part) to the relevant contravention, the Director may impose such relevant sanction on the relevant director as the Director considers appropriate after having regard to the circumstances referred to in section 957D(2).

(3) Subject to subsection (4), the relevant director the subject of a relevant decision may appeal to the court against the decision.

(4) An appeal under subsection (3) shall be brought within 3 months after the date on which the relevant director was notified of the relevant decision by the Director.

(5) A finding or relevant decision of the Director under this section is not a bar to any civil or criminal proceedings against the relevant director who is the subject of the finding or relevant decision.

(6) Subject to subsection (7), the Director shall, as soon as is practicable after imposing under this section a relevant sanction on a relevant director, give particulars of the relevant director and of the sanction imposed to the Supervisory Authority.

(7) The Director shall immediately communicate to the Supervisory Authority particulars of any direction given by the Director under section 957C(2)(b).

Sanctions which Director may impose on relevant director for certain conduct

957C. (1) This section applies to a relevant director the subject of a decision under section 957B(2) that the director has engaged in conduct giving rise (whether in whole or in part) to a relevant contravention.

(2) Subject to section 957D, the Director may impose on the relevant director one or more of the following sanctions in relation to the relevant contravention:

(a) a direction to the relevant director that he or she cease the conduct giving rise (whether in whole or in part) to the contravention and abstain from any repetition of that conduct;

(b) a direction to the relevant director prohibiting the director, for the period specified in the direction (being a period of not more than 3 years’ duration), from performing functions in audit firms or public-interest entities;

(c) subject to section 957G, a direction to the director to pay an amount, as specified in the direction but not exceeding €100,000, to the Director.

(3) In default of payment of an amount referred to in subsection (2)(c), the Director may recover that amount as a simple contract debt in any court of competent jurisdiction.

Relevant circumstances to be considered in imposing relevant sanctions on relevant director

957D. (1) This section applies to a relevant director the subject of a decision under section 957B(2) that the director has engaged in conduct giving rise (whether in whole or in part) to a relevant contravention.

(2) In imposing a relevant sanction on a relevant director, the Director shall consider the following circumstances:

(a) the gravity and duration of the relevant contravention;

(b) the degree of responsibility of the relevant director;

(c) the financial strength of the relevant director (including the annual income of the director);

(d) the amount of profits gained or losses avoided by the relevant director in consequence of the contravention, in so far as they can be determined;

(e) the level of cooperation of the relevant director with the Supervisory Authority or Director, or both;

(f) previous impositions of relevant sanctions on the relevant director.

Resolution of suspected certain conduct by agreement – relevant director

957E. (1) Subject to subsection (2), if the Director believes on reasonable grounds that a relevant director has engaged in conduct (in this section referred to as the ‘relevant conduct’) giving rise (whether in whole or in part) to a relevant contravention referred to in section 936A(1), the Director and the relevant director may, at their absolute discretion, enter into an agreement (in this section referred to as a ‘section 957E agreement’) to resolve the matters relating to such conduct.

(2) The following provisions shall apply to the section 957E agreement:

(a) the agreement may be entered into notwithstanding that no investigation under Part 13 into the relevant conduct has been commenced;

(b) the agreement may be entered into after an investigation under Part 13 into the relevant conduct has been commenced but not, subject to paragraph (d), after it has been completed;

(c) without prejudice to the generality of the terms of the agreement, such terms may include terms under which the relevant director accepts the imposition of one or more relevant sanctions that may be imposed under section 957B(2);

(d) the agreement may be entered into after an investigation under Part 13 has been undertaken and carried out only to the extent to determine which sanctions (if any) referred to in paragraph (c) to impose on the relevant director;

(e) the terms of the agreement are binding on the Director and the relevant director.

(3) Subject to subsection (6), the provisions of sections 957C, 957D, 957F, 957G and 957H shall apply, with any necessary modifications, to any relevant sanctions imposed on a relevant director pursuant to a section 957E agreement as those sections apply to any relevant sanctions imposed on a relevant director otherwise than pursuant to a section 957E agreement.

(4) Subject to subsection (5), where the relevant director with whom the Director has entered into the section 957E agreement fails to comply with one or more of the terms of the agreement, the Director may apply to the court for an order compelling that relevant director to comply with those terms.

(5) In default of payment, any amount agreed to be paid to the Director by the relevant director under the section 957E agreement may be recovered by the Director from the relevant director as a simple contract debt in any court of competent jurisdiction.

(6) The necessary modifications referred to in subsection (3), in so far as section 957F is concerned, include reading that section as if—

(a) the following subsection were substituted for subsection (1) of that section:

‘(1) Subject to subsection (3), the Director shall, in so far as a relevant decision imposes a relevant sanction on a relevant director, as soon as is practicable, publish on his or her website particulars of the relevant contravention to which the relevant sanction relates, particulars of the relevant conduct, particulars of the relevant sanction imposed and particulars of the relevant director on whom the relevant sanction was imposed.’,

(b) subsections (2) and (4) of that section were deleted, and

(c) in subsection (5) of that section, the reference to ‘or (2)’ were deleted.

(7) Section 957I shall be disregarded for the purposes of a section 957E agreement.

Publication of relevant sanction imposed on relevant director

957F. (1) Subject to subsections (2) and (3), the Director shall, in so far as a relevant decision imposes a relevant sanction on a relevant director, as soon as is practicable after—

(a) that decision has been confirmed by the court as referred to in section 957I(4), or

(b) a decision of the court under section 957I(2)(b) has been made to impose a different relevant sanction on the relevant director,

publish on his or her website particulars of the relevant contravention to which the relevant sanction relates, particulars of the relevant conduct, particulars of the relevant sanction imposed and particulars of the relevant director on whom the relevant sanction was imposed.

(2) Subject to subsection (4), if there is an appeal to the court from a confirmation referred to in subsection (1)(a), or a decision referred to in subsection (1)(b), the Director shall, as soon as may be, as he or she considers appropriate, publish particulars on his or her website of the status or outcome of the appeal.

(3) The Director shall publish the particulars, comprising a public notice of a relevant sanction imposed, on an anonymous basis on the Director’s website in any one or more of the following circumstances:

(a) the Director, following an assessment of the proportionality of the publication of those particulars in accordance with subsection (1) in so far as personal data are concerned, is of the opinion that, in relation to the relevant sanction imposed on the relevant director, such publication would be disproportionate;

(b) the Director is of the opinion that the publication of those particulars in accordance with subsection (1) would jeopardise the stability of financial markets or an ongoing criminal investigation;

(c) the Director is of the opinion that the publication of those particulars in accordance with subsection (1) would cause disproportionate damage to the relevant director.

(4) Subsection (2) shall not apply in any case where subsection (3) applies.

(5) The Director shall ensure that particulars published on his or her website in accordance with subsection (1) or (2) remain on his or her website for at least 5 years.

(6) The Director shall, as soon as is practicable after publishing a public notice of a relevant sanction imposed in relation to a relevant director, give particulars of the relevant director and of the relevant sanction imposed to the Supervisory Authority.

Limitations on imposing monetary sanctions on relevant director

957G. (1) If the Director decides to impose a monetary sanction on a relevant director, the Director shall not impose an amount that would be likely to cause the relevant director to be adjudicated bankrupt.

(2) If the conduct engaged in by the relevant director has given rise (whether in whole or in part) to 2 or more relevant contraventions, the Director shall not impose more than one monetary sanction on the relevant director in respect of the same conduct.

Relevant director not to be liable to be penalised twice for same conduct

957H. (1) If the Director imposes a monetary sanction on a relevant director and the conduct engaged in by the relevant director that has given rise (whether in whole or in part) to the relevant contravention is an offence under the law of the State, the relevant director shall not be liable to be prosecuted or punished for the offence under that law.

(2) The Director shall not impose a monetary sanction on a relevant director if—

(a) the relevant director has been charged with having committed an offence under a law of the State and has either been found guilty or not guilty of having committed the offence, and

(b) the offence involves the conduct engaged in by the relevant director that has given rise (whether in whole or in part) to the relevant contravention.

Appeals to and orders of court, including orders confirming decisions of Director

957I. (1) In an appeal under section 957B(3), the court may consider any evidence adduced or argument made, whether or not adduced or made to the Director.

(2) On the hearing of such an appeal, the court may make any order or give any direction it thinks fit, including an order—

(a) confirming the decision under appeal, or

(b) modifying or annulling that decision.

(3) A relevant decision, in so far as it relates to the imposition of a relevant sanction on a relevant director, does not take effect until that decision is confirmed by the court either—

(a) on appeal under section 957B(3), or

(b) on application by the Director under subsection (4).

(4) On application by motion on notice by the Director for an order confirming a decision referred to in subsection (3), the court may make an order confirming the decision or may refuse to make such an order.

(5) On an application under section 957E(4) for an order compelling compliance with a section 957E agreement, the court may make any order or give any direction as it thinks fit.”.

Amendment of section 1097 of Principal Act

46. Section 1097 of the Principal Act is amended by the substitution of “section 1551 (which relates to an obligation of a public-interest entity to establish an audit committee)” for “Regulation 115 (which relates to an obligation of a public-interest entity to establish an audit committee) of the 2016 Audits Regulations”.

Amendment of section 1291 of Principal Act

47. Section 1291 of the Principal Act is amended, in subsection (1)(a)(iv), by the substitution of “section 1293” for “section 1292”.

Amendment of section 1305 of Principal Act

48. Section 1305 of the Principal Act is amended, in subsection (3)(b), by the substitution of “the Audit Directive (within the meaning of Part 27)” for “the Audit Directive (within the meaning of the 2016 Audits Regulations)”.

Amendment of section 1401A of Principal Act

49. Section 1401A of the Principal Act is amended, in subsection (4), in the substituted subsection (1) of section 376, by the substitution of “section 366” for “section 367”.

Amendment of section 1438 of Principal Act

50. Section 1438 of the Principal Act is amended, in subsection (3), by the insertion of “, and Part 27,” after “Part 6”.

Statutory audits

51. The Principal Act is amended by the insertion of the following Part after Part 26: