Joan Burton (Dublin West, Labour)
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286. To ask the Minister for Jobs, Enterprise and Innovation her plans to help to restore confidence in auditing following a string of corporate collapses; her further plans to implement a public grade system to evaluate the quality of audit work by accountancy firms; and if she will make a statement on the matter. [25313/19]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Since 2016 the rules governing statutory audit in Ireland have been significantly enhanced following the transposition of two EU instruments. The EU’s decision to reform the regulation of statutory audit came as a result of the EU Commission’s assessment, following the financial crisis, of the role of audit in that crisis. One of the main objectives of the EU reform was to improve audit quality.

The resulting Audit Directive (2014/56/EU) and Regulation ((EU)(537/2014)) updated existing EU law and were given effect in S.I. 312 of 2016 and elevated to primary legislation in the Companies (Statutory Audits) Act 2018.

The Audit Directive put requirements for statutory auditors on a statutory footing such as in relation to assessing and maintaining independence from the audited entity and maintaining professional scepticism. The Audit Regulation, which has direct effect, introduced additional requirements specifically addressed to auditors of public-interest entities. Public-interest entities are systemically important entities such as credit institutions and insurance undertakings. Entities with securities listed on a regulated main market in the EU are also classified as public-interest entities.

The main requirements are

- A public-interest entity must change auditor at least every 10 years

- The prohibition on certain non-audit services to a public-interest entity by its auditor

- A cap on fees from non-audit services relative to audit fees

The transposition of the audit reform package provided the Irish Auditing and Accounting Supervisory Authority (IAASA), which is an independent body responsible for the supervision of auditing and accounting profession, with new powers to further enhance audit quality and the system of oversight of statutory audit in Ireland.

IAASA is designated as the single competent authority with responsibility for the oversight of statutory auditors and audit firms in accordance with the EU reform package. Under the Audit Regulation, IAASA has direct responsibility for the quality assurance of audits of public-interest entities. IAASA is also responsible for any investigations or sanctions arising, as a result of those quality assurance inspections.

As part of its new responsibilities IAASA issued a public consultation ‘The future publication and grading policy for audit firms that carry out statutory audits of public-interest entities’. IAASA’s consultation and feedback papers on foot of this consultation and its conclusions in this regard are available on the Authority’s website at . As IAASA is independent in the exercise of its functions, I have no direct role in this matter.

Joan Burton (Dublin West, Labour)
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287. To ask the Minister for Jobs, Enterprise and Innovation if the Irish Auditing and Accounting Supervisory Authority plans to make public its audit quality inspection reports of public interest entities in view of the fact the results of the inspections have already been shared with the auditors involved; and if she will make a statement on the matter. [25314/19]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The Irish Auditing and Accounting Supervisory Authority (IAASA) is an independent body responsible for the supervision of the auditing and accounting profession and its functions and powers are set out in the Companies Act 2014.

Under the EU Audit Regulation (Regulation (EU) 537/2014), IAASA has direct responsibility for the quality assurance of audits of public-interest entities (‘PIEs’). Public-interest entities (‘PIEs’) are systemically important entities such as credit institutions and insurance undertakings. Entities with securities listed on a regulated main market in the EU are also classified as public-interest entities. IAASA is also responsible for any investigations or sanctions arising as a result of those quality assurance inspections.

By the end of 2018 IAASA had carried out inspections in each of the nine audit firms that carry out statutory audits of PIEs and accordingly fall under its remit under the above Regulation.

IAASA’s Audit Quality Unit has now commenced the second round of inspections of PIE audit firms. The quality control systems of all firms will be inspected in full over the course of the second round.

In November 2018 IAASA issued a public consultation ‘The future publication and grading policy for audit firms that carry out statutory audits of public-interest entities’. The Consultation Paper sets out the purpose of the reports and IAASA’s proposed policy in this regard. Feedback was published in April 2019. IAASA’s consultation and feedback papers on foot of this consultation and its conclusions in this regard are available on the Authorities website at www.iaasa.ie/News/2019/Publication-and-Grading-Feedback-Paper-(1).

It is intended that reports from the second cycle of audit inspections onwards will be published as the system of inspections will have been fully established on a cyclical basis. At this time it is anticipated that such reports will be published during 2020.

As IAASA is independent in the exercise of its functions, I have no direct role in this matter.