Companies (Auditing and Accounting) Act 2003 (Procedures Governing the Conduct of Section 24 Investigations) Regulations, 2012

• Jurisdiction: Ireland
• Citation: IR SI 97/2012
• Year: 2012

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 3rd April, 2012.

The IRISH AUDITING AND ACCOUNTING SUPERVISORY AUTHORITY, in exercise of its powers conferred on it by section 28 (4) of the Companies (Auditing and Accounting) Act 2003 (No. 44 of 2003), hereby makes the following regulations:

PART 1

PRELIMINARY AND GENERAL

Citation and application

1. (1) These Regulations may be cited as the Companies (Auditing and Accounting) Act 2003 (Procedures Governing the Conduct of Section 24 Investigations) Regulations, 2012.

(2) Section 24 of the Companies (Auditing and Accounting) Act, 2003 provides that, following a complaint or on its own initiative, the Authority may, if in its opinion it is appropriate or in the public interest to do so, undertake an investigation into a possible breach of a prescribed accountancy body’s standards by a member or member firm of that body.

Commencement

(3) These Regulations come into operation on the 29th day of March 2012.

Revocation

(4) The Companies (Auditing and Accounting) Act 2003 (Procedures Governing the Conduct of Section 24 Investigations) Regulations 2009 ( S.I. No. 355 of 2009 ) are revoked.

Saver

(5) 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.

(6) Section 28(4) of the Act provides, inter alia, that the Authority shall make Regulations respecting the procedures to be followed in conducting investigations under section 24 of the Companies (Auditing and Accounting) Act 2003 .

(7) These Regulations apply to any matter that appears to the Authority may constitute grounds for the initiation of an investigation under section 24 of the Companies (Auditing and Accounting) Act 2003 .

(8) These Regulations shall be construed in accordance with the Companies Acts 1963 to 2009.

(9) 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 (Auditing and Accounting) Act 2003 as amended, shall have the same meaning.

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

“the Act” means the Companies (Auditing and Accounting) Act 2003 , (No. 44 of 2003) as amended;

“the Authority” means the Irish Auditing and Accounting Supervisory Authority, and includes any committee established to assist the Authority under section 27(1) of the Act;

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

“complainant” means a person (other than an officer or employee of the Authority) who has lodged a complaint with the Authority regarding a possible breach of a prescribed accountancy body’s standards by a member or member firm of that prescribed accountancy body;

“Court” means the High Court;

“documents” include any books, documents, records, telephone recordings or computer held information of whatsoever kind;

“investigation” means an investigation initiated under section 24(2) of the Act and includes a preliminary investigation initiated under these Regulations;

“Investigation Committee” means a committee established by the Authority to conduct a full investigation in accordance with these Regulations;

“member” has the same meaning as provided for in the Act and includes a member firm unless otherwise indicated in these Regulations;

“Preliminary Investigation Committee” means a committee established by the Authority to conduct a preliminary investigation in accordance with these Regulations;

“relevant person” means—

(a) a member of a prescribed accountancy body,

(b) a client or former client of such member,

(c) 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,

(d) the prescribed accountancy body or any person who is or was an officer, employee or agent of that body, or

(e) 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.

“Section 24 Committee” means both or either a Preliminary Investigation Committee and an Investigation Committee;

“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.

PART 2

SECTION 24 COMMITTEES

Section 24 Committees

3. (1) Subject to paragraph (2) and in accordance with section 27(1) of the Act, a Section 24 Committee shall consist of persons from one or more of the following categories of persons:

(a) persons who are, at the time the committee is established, directors of the Authority,

(b) other persons that the Authority considers appropriate.

(2) Neither the Chief Executive of the Authority nor any member of the staff of the Authority shall be a member of a Section 24 Committee.

(3) Each Section 24 Committee shall number at least 3 persons. The members who are not directors shall be chosen from a panel of suitable independent persons which shall be prepared and maintained by the Authority. The Chairperson of each Section 24 Committee shall be chosen by the Chairperson of the Authority.

(4) The quorum necessary for the transaction of the business by a Section 24 Committee may be fixed by the Authority and, unless so fixed, shall be three, provided that three persons are personally present and that the majority of members present are not members of a prescribed accountancy body.

(5) Any decision of a Section 24 Committee shall be decided by a majority of votes. In case of an equality of votes, the Chairperson of the Committee shall have a second or casting vote.

(6) No serving member of the governing body of any prescribed accountancy body, or any officer or employee of any of the prescribed accountancy bodies, may be appointed to a Section 24 Committee.

(7) No person who, in the view of the Authority may have (or may appear to have) any interest in the outcome of the investigation or any relationship with any party to the matters which are the subject of the investigation which may create, or appear to create, a conflict of interest may be appointed to a Section 24 Committee.

(8) Any person who served as a member of a Preliminary Investigation Committee may not be appointed as a member of an Investigation Committee with respect to the same investigation.

(9) No person who is a member of the same prescribed accountancy body as the member or member firm under investigation may take part in the deliberations of a Section 24 Committee involved in such matter.

(10) The Secretary to the Authority or another person selected and appointed by the Authority may act as Secretary to a Section 24 Committee.

Preliminary Investigation Committee

4. (1) If, in the Authority’s opinion, it is appropriate or in the public interest to undertake a preliminary investigation into a possible breach of a prescribed accountancy body’s standards, then the Authority may appoint a Preliminary Investigation Committee (“Preliminary Investigation Committee”), to determine whether the Authority should initiate a full investigation.

For the avoidance of doubt, matters referred to in Section 24(11A) of the Act may, without prejudice to the generality of the preceding provisions of that Section, be the subject of an investigation by the Supervisory Authority under this Regulation.

(2) In appointing a Preliminary Investigation Committee, the Authority shall be deemed to have delegated to that Preliminary Investigation Committee such of its functions and powers under section 24 of the Act as are required to conduct the functions of the Preliminary Investigation Committee for which these Regulations provide.

(3) No preliminary investigation may be undertaken into a matter that is, or has been, the subject of an enquiry under section 23 of the Act relating to such member except with the permission of the High Court.

(4) Save in exceptional cases, the Authority should not refer the matter to a Preliminary Investigation Committee on the basis of an anonymous complaint.

(5) The Preliminary Investigation Committee shall notify the member affected and the prescribed accountancy body of which the member is a member of its appointment and of the initiation of the Preliminary Investigation.

(6) A full investigation will be initiated if the Preliminary Investigation Committee determines that:

(a) there is a prima facie case that a member has breached a prescribed accountancy body’s standards; and

(b) in its opinion, it is appropriate or in the public interest that there should be a full investigation by the Authority into such possible breach.

(7) In determining whether it is appropriate or in the public interest that there should be such a full investigation, the Preliminary Investigation Committee shall take into account such matters as it considers appropriate, including but not limited to the question (a) of whether the possible breach has already been investigated or is in the course of investigation by a prescribed accountancy body or another supervisory body, and (b) of whether a possible breach ought to be referred to a prescribed accountancy body or another supervisory body for investigation.

(8) Where the Preliminary Investigation Committee forms the view that a matter before it ought to be referred to a prescribed accountancy body or another supervisory body for investigation, it will refer the matter to such prescribed accountancy body or other supervisory body, provided however that the Authority shall...