Companies Act 2014 (Procedures Governing the Conduct of Section 934 Investigations) Regulations 2020

• Jurisdiction: Ireland
• Citation: IR SI 16/2020
• Year: 2020

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 28th January, 2020.

The IRISH AUDITING AND ACCOUNTING SUPERVISORY AUTHORITY, in exercise of its powers conferred on it by section 937 (1) and 938 (4) of the Companies Act 2014 , as amended, hereby makes the following regulations:

PART 1 PRELIMINARY AND GENERAL

Citation and application

1. (1) These Regulations may be cited as the Companies Act 2014 (Procedures Governing the Conduct of Section 934 Investigations) Regulations 2020.

(2) Section 934(2)(a) of the Act provides that, subject to sections 934(2)(b) and 934(3) of the Act, the Authority may undertake an investigation into a possible relevant contravention committed by a specified person—

(a) following a complaint, or

(b) on its own initiative.

(3) Section 934(2)(b) of the Act provides that the 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 Authority is of the opinion that it is appropriate or in the public interest to do so.

(4) Section 934(3) of the Act provides that an investigation shall not be undertaken into a matter that is or has been the subject of an enquiry under section 933 of the Act relating to the specified person except with the permission of the Court granted on application under section 933(5) of the Act.

(5) Section 933(5) of the Act provides that if at any time before completing an enquiry under section 933 of the Act into a matter relating to a member, the Authority forms the opinion that it is appropriate or in the public interest that a matter be investigated under section 934 of the Act 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 section 934 of the Act.

Commencement

(6) These Regulations come into operation on the 21 day of January 2020.

Revocation

(7) The Companies (Auditing and Accounting) Act 2003 (Procedures Governing the Conduct of Section 24 Investigations) Regulations 2012 ( S.I. No. 97 of 2012 ) are revoked.

Saver

(8) Nothing in these Regulations shall affect any existing investigations instituted or ongoing before the commencement of these Regulations and such investigations shall continue to operate pursuant to the previous Regulations as if these Regulations had not come into operation.

(9) Section 938(4) of the Act provides, inter alia, that the Authority may make Regulations respecting the procedures to be followed in conducting investigations under section 934 of the Act.

(10) These Regulations apply to any matter that appears to the Authority may constitute grounds for the initiation of an investigation under section 934 of the Act.

(11) These Regulations shall be construed in accordance with the Act, as may be amended from time to time.

(12) Headings and sub-headings are for convenience only and shall not affect the interpretation of these Regulations.

Interpretation

2. (1) Except where otherwise stated, words and expressions used in these Regulations that are used in the Companies Act 2014 , as amended, shall have the same meaning.

(2) In these Regulations, unless the context otherwise requires—

“the Act” means means the Companies Act 2014 , as amended;

“adverse finding” means a finding by an Investigation Committee that a specified person has committed a relevant contravention;

“the Authority” means the Irish Auditing and Accounting Supervisory Authority, and includes any committee established to assist the Authority under section 937(1) of the Act or any officer, employee or person duly authorised pursuant to section 937(3A) or section 937(4) of the Act;

“client” includes an individual, a body corporate, an unincorporated body of persons and a partnership;

“complainant” means a person who has lodged a complaint with the Authority regarding a possible relevant contravention committed by a specified person;

“Court” means the High Court;

“document” includes any books, documents, records, telephone recordings or electronically held information of whatever kind;

“full investigation” means the proceedings to be conducted by an Investigation Committee;

“investigation” means an investigation initiated under section 934 of the Act;

“Investigation Committee” means a committee appointed to conduct a full investigation in accordance with these Regulations;

“member” has the same meaning as provided for by sections 900(1) and 935(5) of the Act and includes a firm unless otherwise indicated in these Regulations;

“preliminary investigation” means an investigation conducted by the Authority in order to determine whether there is a prima facie case that a specified person has committed a relevant contravention and, whether it is appropriate or in the public interest to further investigate the matter;

“prescribed accountancy body” means—

(a) a recognised accountancy body; or

(b) any other body of accountants that is prescribed;

“recognised accountancy body” means a body of accountants recognised under section 930 of the Act for the purposes of the following provisions:

(a) Chapter 2 of Part 15 of the Act,

(b) Part 27 of the Act, and

(c) Regulation (EU) No 537/2014;

“Regulation (EU) No 537/2014” means Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC;

“relevant contravention” means—

(a) a breach of the standards of a prescribed accountancy body by a member of that body, or

(b) a contravention by a statutory auditor of a provision of—

(i) section 336 or 337 of the Act,

(ii) Part 27 of the Act, or

(iii) Regulation (EU) No 537/2014;

“relevant decision”, in relation to a specified person, means—

(a) a decision under section 934(8) or (9) of the Act that a specified person has committed a relevant contravention,

(b) if, in consequence of a decision referred to in paragraph (a), the Authority decides under section 934(8) or (9) of the Act to impose a relevant sanction on the specified person, the decision to impose that sanction, or

(c) both such decisions;

“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 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 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;

“relevant sanction”—

(a) in relation to a specified person who falls within paragraph (a) of the definition of ‘specified person’, means a sanction referred to in section 934(8) of the Act, and

(b) in relation to a specified person who falls within paragraph (b) of the definition of ‘specified person’, means a sanction referred to in section 934C(2) of the Act;

“Section 934E Agreement” means the agreement which, subject to the requirements of Regulation 15(2), the Authority and a specified person may, at their absolute discretion, enter into pursuant to section 934E of the Act;

“specified person”, in relation to a relevant contravention, means—

(a) if the relevant contravention falls within paragraph (a) of the definition of ‘relevant contravention’, the member or former member concerned of the prescribed accountancy body, and

(b) if the relevant contravention falls within paragraph (b) of the definition of ‘relevant contravention’, the statutory auditor or former statutory auditor concerned;

“standards” means the rules, regulations and standards that a prescribed accountancy body applies to its members and to which, by virtue of their membership, they are obliged to adhere;

“statutory auditor’ means an individual or a firm (within the meaning of Part 27 of the Act) that stands approved as a statutory auditor or statutory audit firm, as the case may be, under Part 27 of the Act, and includes a firm registered in accordance with section 1465 of the Act.

PART 2

PRELIMINARY INVESTIGATION

Decision to initiate a preliminary investigation by the Authority

3. (1) (a) Subject to subparagraph (b)...