Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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199. To ask the Minister for Jobs, Enterprise and Innovation when the legislation to give effect to Directive 2014/56/EU of the European Parliament and of the Council will be finalised, if it will require public interest entities to rotate their auditors or to re-tender for audit services every ten years, as provided for in the directive; if a very strict interpretation of the directive will harm Ireland’s competitive position; and if he will make a statement on the matter. [45349/15]

Richard Bruton (Dublin North Central, Fine Gael)
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The Audit Directive (2014/56/EU), amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts, and the Audit Regulation (EU) No. 537/2014 on specific requirements regarding the statutory audit of public-interest entities (PIEs), were adopted on 16 April, 2014.

The Regulation applies in Ireland as and from 17 June 2016, and the Directive is to be transposed into Irish law by the same date. The Regulation adds to the provisions of the Directive by introducing stricter requirements for the statutory audits of public-interest entities, such as listed companies, credit institutions, and insurance undertakings. It provides, inter alia, that public-interest entities shall appoint a statutory auditor or audit firm for a period not longer than 10 years. At the end of that period, all PIEs must re-tender for audit services.

Member States then have an option to allow PIEs to reappoint the same auditor for a second period of up to 10 years. Therefore, an engagement between a particular statutory auditor or audit firm and a PIE could be for a total period of 20 years at most, subject to the requirement on the PIE to put its audit out to tender after the first 10 years.

In developing the proposed approach to the Member State options, including the possibility to extend the duration of an audit engagement to 20 years, my Department conducted a public consultation process late last year on the options in both the Regulation and the Directive. The outcome of that consultation, together with input from stakeholders since then, will inform our approach. The impacts of the measures on a range of factors, including national competitiveness, will be taken into account.

My Department is preparing a General Scheme of a Bill to transpose the EU rules into Irish law. I intend to bring that Scheme to Government shortly, with a view to publishing it after that.