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Audit in Ireland

The auditing regulations in Ireland are largely governed by the Companies Act 2014 as updated by the Companies Act 2018 which implemented the EU’s Statutory Audit Directive and Regulation 2014.

Copies of the above legislation can be obtained from the website of the Irish Auditing and Accounting Supervisory Authority.

This note is to draw firms’ attention to a few matters relating Irish company law. While most of this note concerns corporate audit firms, it is suggested that all firms who undertake audits of Irish entities read this note and the legislation referred to above.

Brexit: Removal of audit rights in Ireland

Copy: The Irish audit authorities have interpreted the Audit Directive to mean that non-Irish resident accountancy firms currently on the Irish Audit Register are unlikely to retain automatic audit rights in Ireland after 29 March 2019. For scenario planning, it must be assumed that in the event of a no deal Brexit, UK firms have to cease audit services to existing Irish clients.

Corporate auditors

SI 220 removed the prohibition in section 187 of the Companies Act 1990 that prevented corporate firms being auditors. So auditors who are constituted as companies or limited liability partnerships can accept appointment as company auditor in Ireland.

However, up until 2018 corporate auditors (such as LLPs) could not as ‘public auditors’; that is auditors of societies registered under the Industrial and Provident Societies Acts 1893 to 1978, or the Friendly Societies Acts 1896 to 1993. The restriction under section 187 of the Companies Act 1990 (as transcribed into section 1441 of the Companies Act 2014) was repealed by the Companies Act 2018. 

Responsible individuals

There is one further issue you may need to consider, although it only affects a very few firms and then not significantly. Chapter 4 of the Audit Regulations states that although the audit qualifications of the three chartered institutes (and the ACCA) are recognised in the UK and Ireland, other qualifications are not.

Individuals who hold an EEA audit qualification need to pass an aptitude test. The test in the UK is different to the one in Ireland, so passing an aptitude test in one country does not give the holder of an EEA qualification the right to be a responsible individual in the other country. They can, however, still count towards the control requirement of an audit firm in each country.

For audit qualifications from outside the EEA, a similar position arises. As well as different aptitude tests, the underlying qualification may not have been recognised in both countries; at the moment the UK has recognised certain Australian and Canadian qualifications, Ireland has yet to recognise any. So such people can only be responsible individuals (and count towards the control requirement) in the country in which they have taken an aptitude test.

Audit Regulations

The Audit Regulations were updated in April 2017 for the requirements of the EU legislation , and the details of changes set out in Audit News 59 and the summary of changes.