Investment Intermediaries Act, 1995
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Auditors for investment business firms which are not incorporated bodies and duties of auditors. |
33.—(1) An authorised investment business firm (other than a certified person or a person who does not provide investment business services) which is constituted as an unincorporated body of persons or as a sole trader shall be required to appoint an auditor to audit and make a report on its accounts on an annual basis and a person shall not be qualified for appointment as an auditor of an authorised investment business firm which is constituted as an unincorporated body of persons or sole trader unless he meets the requirements of, and is not excluded by, the provisions of the Companies Acts. | |
(2) A supervisory authority may set out requirements in respect of the accounts and audit of an authorised investment business firm which is constituted as an unincorporated body of persons or as a sole trader including requirements which are analogous to those set out in the Companies Acts and may impose duties or obligations on the auditor or on the authorised investment business firm concerned. | ||
(3) If at any time an auditor of an authorised investment business firm and, in the case of paragraphs (e) and (f) of this subsection, an auditor of an investment business firm— | ||
(a) has reason to believe that there exist circumstances which are likely to affect to a material degree the ability of the authorised investment business firm to fulfil its obligations to investors or clients or meet any of its financial obligations, or | ||
(b) has reason to believe there are material defects in the accounting records or systems of control of the business and records, or | ||
(c) has reason to believe that there are material inaccuracies in, or omissions from, any returns made by an authorised investment business firm to the supervisory authority, or | ||
(d) proposes to qualify any report or certificate which he is to provide in relation to the financial statements or returns of an authorised investment business firm under the Companies Acts, or under this Act, or | ||
(e) has reason to believe that there are material defects in the system of any investment business firm for ensuring the safe custody of money or investment instruments of clients or has reason to believe that an investment business firm is not complying with client money requirements or rules or provisions of this Act, or | ||
(f) has reason to believe that an investment business firm which is a certified person has breached to a material degree the rules relating to the provision of investment business services of any approved professional body by which it is regulated or supervised, or | ||
(g) decides to resign or not to seek re-election as auditor, | ||
the auditor shall report the matter to the relevant supervisory authority in writing without delay. | ||
(4) The auditor of an investment business firm, if requested to do so by a supervisory authority, shall furnish to the supervisory authority a report stating whether, in the opinion of the auditor and to the best of the knowledge of that auditor, the investment business firm has or has not complied with— | ||
(a) any condition or requirement set out or imposed under this Act in relation to financial resources, money or investment instruments of clients, accounting records and specified aspects of control systems or any or all of these, or | ||
(b) any condition or requirement set out in or imposed under this Act, | ||
and the supervisory authority concerned may specify that such a report be furnished to it in such form as it may specify either on an annual basis or on such other occasion as the supervisory authority may specify or both. | ||
(5) Where the auditor of an investment business firm so requests, a supervisory authority may provide to the auditor, in writing, details of any information of a financial nature concerning the said investment business firm as the auditor requests for the purpose of enabling him to comply with this Act. | ||
(6) An auditor of an investment business firm shall send to the investment business firm concerned a copy of any report made by him to a supervisory authority under subsection (3) or (4) of this section. | ||
(7) An auditor of an authorised investment business firm shall communicate to a supervisory authority any matters which come to the attention of the auditor and are such as to give the auditor reasonable cause to believe that the matter is or may be of material significance for determining either whether— | ||
(a) the level of competence of a person is satisfactory having regard to the matters with which they would be concerned in relation to the business of an authorised investment business firm and their probity is such as to render them suitable to carry on the business of an authorised investment business firm; or | ||
(b) disciplinary action ought to be taken, or a direction given, by reason of the contravention by a person of any provision of this Act or any conditions or requirements, or both, or directions imposed by the supervisory authority under this Act. | ||
(8) (a) Where a supervisory authority is of the opinion that the exercise of its functions under this Act or the protection of investors or clients or the interest of the proper and orderly regulation and supervision of investment business firms so requires, the supervisory authority may require the auditor of an investment business firm to supply it with such information as it may specify in relation to the audit of the business of the said investment business firm and the auditor shall comply with the requirement. | ||
(b) The supervisory authority may specify that, in supplying information for the purposes of this subsection, the auditor shall act independently of an investment business firm. | ||
(9) No duty to which an auditor of an investment business firm may be subject shall be regarded as contravened and no liability to the investment business firm or to the shareholders, creditors, investors, clients or other interested parties of any investment business firm shall attach to the auditor by reason of his compliance with any obligation imposed on him by or under this section. | ||
(10) It shall be the duty of an auditor in preparing an audit or a report under this section to carry out such investigations as will enable him to form an opinion as to whether— | ||
(a) an authorised investment business firm has kept proper accounting records; | ||
(b) an authorised investment business firm has maintained satisfactory systems of control of its business and records and systems of inspection and report thereon; | ||
(c) an authorised investment business firm has complied with rules or requirements relating to money of clients and investment instruments referred to in section 52 of this Act and with the provisions of sections 52 (3), 52 (5), or 52 (6); | ||
and, where an auditor is of the opinion that an authorised investment business firm has failed to keep proper accounting records or to maintain a satisfactory system of control of its business or records, or has failed to comply with the rules or requirements of this Act referred to in paragraph (c) of this subsection the auditor shall so state in his report. | ||
(11) An auditor of an authorised investment business firm shall have a right of access at all reasonable times to the books, accounts, records and vouchers of an authorised investment business firm and to all other documents relating to its affairs (including documents and records relating to clients' money and investment instruments) and shall be entitled to require from the officers, directors, managers and employees of the said authorised investment business firm such information and explanations as are within their knowledge or can be procured by them as the auditor thinks necessary for the performance of the duties of auditor. | ||
(12) Subject to subsection (15) of this section, where an authorised investment business firm has a related undertaking or associated undertaking, then— | ||
(a) if the associated undertaking or related undertaking is a body established or operating in the State it shall be the duty of the associated undertaking or related undertaking and its auditors to give to the auditors of an authorised investment business firm, as the case may be, such information and explanation and such access to documents as those auditors may reasonably require for the purpose of their duties as auditors of the authorised investment business firm concerned; and | ||
(b) in any other case, it shall be the duty of an authorised investment business firm, if required by its auditors to do so, to take all such steps as are reasonably open to it to obtain from the related undertaking or associated under taking such information and explanation and such accessas are mentioned in paragraph (a) of this subsection. | ||
(13) A supervisory authority, following consultation with the other supervisory authority, may set out requirements in respect of the audit of authorised investment business firms and such requirements may relate to the communication of specified matters to the supervisory authority which may include matters relating to an associated undertaking or related undertaking. | ||
(14) Any report requested by a supervisory authority under this section shall be prepared at the expense of the investment business firm concerned and shall be carried out and made within such time as may be specified by the supervisory authority or within such further time as the supervisory authority may allow. | ||
(15) An associated undertaking or a related undertaking may apply to the Court for an order prohibiting the auditor of an authorised investment business firm from requesting particular information or classes of information under this section from that associated undertaking or related undertaking on the basis that it is unreasonable and unnecessary for the auditor to request that information. |