Alan Kelly (Tipperary, Labour)
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552. To ask the Minister for Jobs, Enterprise and Innovation if she intends to transpose the European Union audit directive by the deadline of 17 June 2016; and the practical consequences of not having it transposed by the deadline. [16853/16]

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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I signed the European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No 537/2014) Regulations 2016 (S. I. No. 312 of 2016) on 15 June 2016 and they took effect on 17 June 2016. This Statutory Instrument gives effect to Ireland’s obligations under the EU audit reform package, comprising Directive (2014/56/EU) which amends Directive 2006/43/EC and a Regulation (EU) No 537/2014. Accordingly, the EU transposition deadline has been met.

The Directive applies to all statutory audits while the Regulation adds more stringent rules for the audits of entities such as financial and credit institutions, insurers, funds and listed companies, known as ‘public interest entities’. Both the Directive and the Regulation contain options for Member States to consider.

Had Ireland not transposed the EU reforms on time, there could have followed a number of negative consequences. Those include the fact that the Irish Auditing and Accounting Supervisory Authority (IAASA) would not have been designated as the competent authority and would not have had the appropriate powers to implement and enforce the new enhanced oversight regime for audit. New rules on ethics and audit reporting for auditors would not have the necessary legislative underpinning. Auditors and other stakeholders would not have clarity as to how Ireland intended to exercise the options in the EU Directive and Regulation. National law also gives clarity on how to comply with some of the provisions in the EU Regulation, which is directly applicable in Ireland. Furthermore, Ireland could have faced infringement proceedings by the European Commission and fines.

There were some options in the EU Directive and Regulation that were not essential to transposition and could not be accommodated in the Statutory Instrument. As some of these are considered to be beneficial, it is my intention to introduce a Statutory Audits Bill in the Oireachtas in due course to avail of those options.