Maurice Quinlivan (Limerick City, Sinn Fein) | Oireachtas source

I welcome the legislation, the main purpose of which is to transpose the EU accounting directive into Irish law. In particular, I welcome chapter 10 of the accounting directive which allows for greater oversight of companies working in the extractive industry and the logging sector. Essentially, the purpose of the legislation is to introduce a small companies regime and a micro-companies regime which, when enacted, will bring this country into line with other EU countries and the UK.

The Bill will allow for the use in Ireland of sections of the financial reporting standards applicable in the UK for small companies and the financial reporting standards applicable to micro-entity regimes by micro-companies. The Bill allows for change in the definition of small and micro-companies, which in the new legislation are specified as those with an EU maximum threshold of turnover not exceeding €12 million and a balance sheet not exceeding €6 million. In the case of employees, the maximum threshold for qualifying companies is a maximum of 50 employees. It is important to note that in order to qualify as a small company, one must not exceed two or more of the above criteria.

The Bill is a lengthy one with 92 sections and it contains 161 pages. It contains new Schedules to replace current Schedules 3 and 4 of the Companies Act 2014. The new Schedules separate the general entities and group financial statement requirements of Schedules 3 and 4 from those pertaining to small companies, Schedules 3A and 4A, and micro-companies, Schedule 3B.

The Bill also proposes to insert a new Part 26 relating to payments to governments which contains the directive's requirements with regard to paying and filing with the register of companies by large companies, large groups and, as noted previously, by public interest entities active in the mining and extractive industries, annual reports on payments made to governments.

Also included in the Bill are amendments to various sections of the Companies Act 2014. They cover, for example, filing requirements for unlimited companies, matters relating to the Irish Auditing and Accounting Supervisory Authority, IAASA, and the prescribed accountancy bodies, and the corporate governance statement required in section 1373 of the Companies Act 2014.

Essentially, the recategorisation process entailed in the Bill means that some companies previously classified as medium will now become small and will, under the new legislation, qualify for a range of benefits contained in the Bill.

One such benefit about which I am concerned is the exemption from the requirement to have a statutory audit. As I noted at the outset, Sinn Féin welcomes this Bill. Like its predecessor, the Companies Act 2014, this legislation is complex, long and dense. I can say at this stage that we have concerns about some aspects of it. As I said, any legislation that results in increased transparency and accountability is most welcome. Conversely, we are sceptical about legislative measures or sections within particular Bills that do the opposite. That is what is happening here with the dumbing down of the requirement for statutory audit. We are not happy with this section. We will consider submitting amendments on the issue without taking away from the larger aims of the Companies (Accounting) Bill 2016. We are concerned that the proposed legislation will allow small companies to give fewer note disclosures in their financial statements.

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