The auditing regulations in Ireland are largely governed by the Companies Act 1990, the Companies (Auditing and Accounting) Act 2003 and Statutory Instrument 220 2011 which implemented the EU’s Statutory Audit Directive 2006.
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.
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, corporate auditors (such as LLPs) cannot act 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 still applies for these audits and so corporate auditors cannot accept these appointments.
The position in respect of other entities is not straightforward as there has not been a wholesale change of all laws to reflect the changes made for companies. So, for example, section 87 of the Building Societies Act 1989 refers to a person qualified to be an auditor of a company. That would permit a corporate firm to take the appointment.
Before you accept appointment to an Irish entity that is not a company, we suggest you check the legislation that applies to that entity (or the entity’s constitution for those that are not governed by a specific law) to ensure that the entity can appoint a corporate auditor.
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.