Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael) | Oireachtas source

I move amendment No. 39:

In page 58, between lines 17 and 18, to insert the following:

“Liability of prescribed body for acts, omissions etc.

95.The Principal Act is amended by the insertion of the following section after section 942:“942A. (1) Neither a prescribed body nor any person who is or was—

(a) a member or director, or

(b) other officer or employee,

of the prescribed body shall be liable for damages for anything done, anything purported to be done or anything omitted to be done by the prescribed body or that person in performing the functions specified in subsection (2) unless the act or omission is shown to have been in bad faith.

(2) Subsection (1) applies to the issuing of accounting standards.

(3) In this section, ‘prescribed body’ means a body prescribed under section 943(1)(h).”.”.

This amendment introduces an exemption for bodies that set accounting standards. Under company law, before 2014 it was not necessary to prescribe a body as the setter of accounting standards. However, Part 6 of the Companies Act 2014 now requires that financial statements be prepared in accordance with accounting standards that are issued by a body that is prescribed by the Minister. It is my intention to prescribe the Financial Reporting Council, FRC, in the UK as the standard setter for accounting standards in Ireland. There is a long history of co-operation with the FRC and of using its standards. The FRC consults Irish stakeholders whenever it develops new standards and it has formally established connections with some of the professional accountancy bodies here. Their accountancy advisory council includes an Irish member nominated by the Minister here. The Irish auditing and accounting supervisory authority is an observer. The current standards issued by the FRC have been developed in line with the EU accounting directive and they provide for the new category of micro-entity. The requirement of the Companies Act to prescribe a body will have the effect of placing this long-standing informal situation on a statutory footing. As a result, the FRC will have a role that is recognised in our law. Therefore, I consider that it is appropriate to provide an exemption from certain liability. This exemption is modelled on the existing exemption for the Irish auditing and accounting supervisory authority. In section 942 of the Companies Act it is limited to their activities of setting standards and issuing guidance on those standards and to cases where it has acted in good faith.