Robert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

I thank Deputy O’Reilly. I genuinely acknowledge that she has been extremely constructive from the get-go. However, as I said already, we are not talking about the courts here. We are talking about administrative sanctions that apply only to breaches of statutory audit rules. These rules are derived from the EU law that significantly reformed the regulation of statutory audit across the EU. This was a result of the European Commission assessment of the role of audit in the financial crisis.

IAASA is a competent authority for the purposes of the oversight and supervision of statutory audits in Ireland. One of its functions under the Companies Act 2014 is to undertake reviews at least every three years of audits carried out by statutory auditors and audit firms of public interest entities. Public interest entities are banks, insurance companies and listed companies. They are systemically important to companies in an EU context. If IAASA finds breaches of the audit rules by an auditor or an audit firm it can impose an administrative sanction, including financial sanctions up to €100,000. In the case of a statutory auditor and in the case of an audit firm the figure is €100,000, multiplied by the number of statutory auditors in the firm at that time. As IAASA has no role in respect of the directors of companies, if it suspects that a director has contributed to the breach of the audit rules, it must supply that information to Office of the Director of Corporate Enforcement. Following the enactment of this legislation, the new authority can then undertake an investigation and impose administrative sanctions on directors, similar to what IAASA can do. These administrative sanctions on directors support the framework for the oversight of statutory audit by IAASA. They are required under EU law. Member states are obliged to provide for exceptions to the publication of details and sections. However, it is intended that these are exceptional. I want to emphasise that in the course of an investigation into breaches of audit rules, if the authority finds other serious contraventions by a director to the Companies Act 2014, such as false statements, false financial records or fraudulent trade trading, then those matters can be pursued by the courts. We are therefore talking specifically about audit rules only in this section. It is to keep this legislation mirroring the IAASA legislation. We are not changing anything else.

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An Leas-Cheann Comhairle:I got distracted. The Minister of State is out of time now.

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