Companies (Statutory Audits) Act 2018
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Amendment of Principal Act - insertion of sections 934A to 934I | ||
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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.”. |