Business Law RoI

Applications for renewal of licenses are due by 3 September 2018.   As members are aware, the Court requires an ‘Independent auditor's or accountant's certificate confirming up to date compliance with all filing and tax requirements pursuant to the provisions of the Companies Act 2014’. Having corresponded with the Court regarding why professional accountants should not sign such a certificate, the Consultative Committee of Accountancy Bodies-Ireland (CCAB-I) met with senior representatives of the Court in recent weeks, at which the attached report format was agreed. Members are advised to use this report format in fulfilling this requirement of the Licensing Court. The attached report will also be available via the Licensing Office in Áras Uí Dhálaigh. Dublin District Licensing Court _ auditor's or accountant's report_July 2018

Jul 20, 2018
Audit

It has been brought to our attention this week that the Valuation Office have issued  form LP1 Valuation of Licensed Premises to a large number of licensed premises owners as part of a national revaluation programme of commercial and industrial properties in Ireland for rates purposes.    The form requests certain figures to be extracted from the books and records of the licence holder and for an accountant to sign the form in addition to providing their professional membership details.  This form requests the signature of an accountant in a form that is not acceptable to professional accountants as it includes a requirement to “certify that the information provided is true and accurate in relation to the above subject property”.  As members are aware we consider that this is wording which accountants would not normally be in a position to use as it implies complete accuracy and absolute certainty. We advise our members not to sign the form but to send it with a covering letter confirming that the numbers have been extracted from the books and records of the licence holder.

Jul 13, 2018
Business law

Developments of interest this week are outlined. Northern Ireland and Republic of Ireland charity regulators to be included in new charity sector SORP-making body. ROI IAASA has published its annual Profile of the Profession, which contains statistical data regarding the nine Prescribed Accountancy Bodies (‘PABs’) within IAASA’s supervisory remit in Ireland for the year 2017. The Companies Registration Office annual report for 2017 is now available as a pdf from the  CRO Corporate Publications webpage or as a webpage: CRO report. The Registry of Friendly Societies annual report for 2017 is now available from the CRO Corporate Publications webpage. UK  The FRC has published its first list of companies whose reports and accounts have been reviewed by its Corporate Reporting Review function. International The June IASB podcast now available

Jul 05, 2018
Audit

We have published TR 03/2018 Licence applications under the Property Services (Regulation) Act 2011 and the Property Services (Regulation) Act (Client Moneys) Regulations 2012 Following consultation with the Consultative Committee of Accountancy Bodies-Ireland (“CCAB-I “), the Property Services Regulatory Authority has published revised forms of accountant’s reports for Licence renewal applications.  TR 03/2018 aims to provide updated guidance for our members when assisting their clients with the licence renewal process.  Information Sheets IS 02/2013  and IS 01/2012 have been withdrawn.  This Technical Release is based on the forms issued in April 2018. TR 03 2018 PSRA Licence Applications is available here

Jun 15, 2018
Audit

Chartered Accountants Ireland has published Technical Alert 03/2018 Guidance on International Standard on Quality Control (Ireland) 1. The purpose of this Technical Alert is to highlight changes made to ISQC (Ireland) 1, from ISQC (UK and Ireland) 1. The source of these changes is primarily the relevant requirements of the EU Audit Regulation and Directive.  IAASA issued the Irish audit framework on 31 January 2017, which includes International Standard on Quality Control (Ireland) 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements, And Other Assurance and Related Services Engagements (‘ISQC (Ireland) 1’).    Systems of quality control in compliance with ISQC (Ireland) 1 were required to be established by firms in Ireland by 1 February 2017.   This Technical Alert is based on the March 2018 edition of ISQC (Ireland) 1.   Technical Alert 03/2018 is available here.

May 31, 2018
Financial Reporting

This week Chartered Accountants Ireland was delighted to host the 28th Audit & Assurance Conference of the British Accounting & Finance Association (BAFA). This is a major event in the academic conference calendar which attracts academics from Ireland, the UK, and beyond.  The Institute welcomed some 90 leading academics specialising in the area of statutory audit and who received a number of academic research papers and case studies on statutory audit and the role of auditors. Plenary sessions addressed the future of audit and assurance, and the future of audit standard setting and included contributions from Big 6 audit partners, regulators, and standard setters. At the commencement of the 2 day conference, Dr Ilias G Basioudis, chairman of the Auditing Group of BAFA said: "This conference is taking place at a critical time for the auditing profession.  Over the next two days we shall be discussing major challenges facing audit and possible measures that might be considered to underpin public confidence in the profession and provide a greater understanding of the role of audit.  "Crucially, we shall also debate what more can done by auditors to provide assurance on company viability, recognising that this debate will require legislative change and input from audit practitioners, regulators and legislators.  The fact that this conference has attracted contributors from around the world also demonstrates the global nature of the auditing profession and the importance of identifying confidence building measures and initiatives that have global acceptance and are capable of global application." Click here for images from the conference. 

May 25, 2018
Audit

Technical Alert 02/2018 published to provide assistance to auditors of insurance undertakings Chartered Accountants Ireland has published Technical Alert 02/2018 Illustrative auditor’s reports on the relevant elements of the Solvency and Financial Condition Report (SFCR) for periods beginning on or after 17 June 2016.   This Technical Alert provides illustrative auditor’s reports on the relevant elements of the SFCR, performed in accordance with ISAs (Ireland), the new Irish auditing framework.   The following illustrative auditor’s reports are included in Technical Alert 02/2018: An auditor’s report on relevant elements of the SFCR for the year ended [insert date] (life insurance undertaking) - such period beginning on or after 17 June 2016 (solo entity using the standard formula) An auditor’s report on relevant elements of the SFCR for the year ended [insert date] (non-life insurance undertaking) – such period beginning on or after 17 June 2016 (solo entity using the standard formula) An auditor’s report on relevant elements of the SFCR for the year ended [insert date] (life insurance undertaking) - such period beginning on or after 17 June 2016 (solo entity using the partial or full internal model) An auditor’s report on relevant elements of the SFCR for the year ended [insert date] (non-life insurance undertaking) – such period beginning on or after 17 June 2016 (solo entity using the partial or full internal model) An auditor’s report on relevant elements of the SFCR for the year ended [insert date] – such period beginning on or after 17 June 2016 (group insurance undertaking using the standard formula) This Technical Alert should be read in conjunction with Section 3 of Technical Release 13/2016 Guidance for auditors of insurance undertakings in Ireland.   Technical Release 13/2016 gives guidance to auditors engaged to provide a reasonable assurance opinion in relation to the relevant elements of the Solvency and Financial Condition Report (‘SFCR’) of an insurance undertaking pursuant to Regulation 37 of the European Union (Insurance and Reinsurance) Regulations 2015 (SI 485 of 2015) (‘the 2015 Regulations’).   Technical Alert 02/2018 is available to read here.

Apr 03, 2018
Audit

Chartered Accountants Ireland has published Technical Alert 01/2018 Illustrative auditor’s report for the audit of financial statements prepared in accordance with the Micro Companies Regime of Companies Act 2014 and FRS 105.   The purpose of this Technical Alert is to provide guidance in relation to matters to be considered by an auditor in the circumstances where an auditor is forming an opinion on the financial statements of a micro company adopting the micro companies regime of the Companies Act 2014 (“the MCR”) and applying FRS 105, The Financial Reporting Standard applicable to the Micro-entities Regime.      Micro companies usually qualify for audit exemption under the Companies Act 2014; however, a company can lose its audit exemption where the company is late in filing its annual return.  In these circumstances, and other cases where the directors of a micro company voluntarily decide to subject the financial statements to an audit, the auditor will need to be alert to the particular characteristics of forming an audit opinion in respect of financial statements prepared in accordance with the MCR and FRS 105.  This Technical Alert highlights some of the key issues in forming an audit opinion in relation to this compliance framework and also provides an illustrative auditor’s report.    Technical Alert 01/2018 is available here.

Apr 03, 2018
Professional Standards

The Professional Standards Department (PSD) Quality Assurance Team has recently compiled a list of common matters arising on audit and investment business inspection visits, which are set out below. Please note that, where PSD returns to firms that have had a relatively recent visit, it conducts follow-up procedures to ensure that the firm has taken action to address matters raised at the previous visit. Audit Inspections Financial  Reporting Firms need to perform audit procedures to evaluate whether the overall presentation of the financial statements, including the related disclosures, is in accordance with the applicable financial reporting framework which, in recent years, has been substantially changed by the introduction of FRS 100-105 and amendments to company law. PSD found that, for the most part, firms had adequately addressed the requirements of FRS 102 and, in RoI, the Companies Act 2014 (‘CA 2014’) through the use of checklists. However, non-application of FRS 102 by audit clients was sometimes not identified. Firms should ensure that their audit procedures to assess the appropriateness and completeness of disclosures are up to date for the relevant financial reporting regimes. Certain common omissions were identified: Statement of Changes in Equity or Statement of Cash Flows, where relevant; Significant judgements and key sources of estimation uncertainty in relation to amounts recognised in the financial statements (FRS 102 s8.6-8.7); Where relevant, material uncertainties related to events or conditions that cast significant doubt upon the entity’s ability to continue as a going concern (FRS 102 s3.8-3.9); The measurement basis (or bases) used for financial instruments and the other accounting policies used for financial instruments that are relevant to an understanding of the financial statements (FRS 102 s11.40); Disclosures relating to creditors required by CA 2014 Schedule 3, such as terms of payment/repayment and the rate of any interest payable on debts. (N.B.The specific FRS 102-related matters noted above relate to financial statements prepared in accordance with the full requirements of FRS 102 and may not be relevant to financial statements where the small/micro companies regime is applied.) International Education Standard (IES) 8 (Revised) IES 8 Professional Competence for Engagement Partners Responsible for Audits of Financial Statements (Revised) was issued by the International Accounting Education Standards Board (IAESB) in December 2014 and is effective from 1 July 2016. Its objective is to establish the professional competence that professional accountants develop and maintain when performing the role of an Engagement Partner. During an audit monitoring visit, the inspector will make enquiries to assess whether a firm is familiar with IES 8 (Revised), including consideration of the learning outcomes which are listed in Table A to the Standard. Firms can obtain a copy of IES 8 (Revised) at: http://www.ifac.org/system/files/publications/files/IAESB-IES-8.pdf Investment Business inspections Investment Business (IB) inspections carried out by PSD over the last few years had focused on firms holding IB1/IB2 authorisation. However, PSD is now conducting an increased number of IB inspections to firms holding all levels of IB authorisation, including a sample of firms holding IA1/IA2 authorisation. Firms should be mindful of, and ensure they address, the following  matters Investment business procedures (IBR 2.56) All authorised firms are required to establish and maintain adequate written investment business procedures. These should include managing conflicts of interest, maintaining ‘Chinese Walls’ and the consequences of breaching them, along with the handling of errors and complaints. A firm must adequately train its principals carrying on investment business and its employees using these procedures. Training (IBR 2.60) Authorised firms must make arrangements to ensure that principals and employees involved in investment business maintain an appropriate level of competence and comply with Institute CPD requirements. Firms authorised in Category IA2 and above must make arrangements to ensure compliance with the Central Bank Minimum Competency Code, which has recently been updated. A copy of the Code can be obtained on the Central Bank of Ireland’s website. Investment Business Compliance Review (IBR 2.58) An authorised firm must carry out an Investment Business Compliance Review (IBCR) at least annually. PSD found that, for some firms, an annual IBCR had not been carried out, or did not include a whole firm review, a review of accounting records and a sample of client files. Some IBCRs did not identify different types of IB advice provided by the firm or non-compliance with the IBRs. Corrective action was not always taken in a timely manner. Engagement letters (IBR 3.19-3.20) PSD found that some firms did not have an engagement letter in place, or the letter had not been agreed with the client prior to investment business advice being provided, as required by IBR 3.19 or did not include the minimum details required by IBR 3.20. Commission consent and disclosure (IBR 3.30-3.32) If a firm receives commission it must account to the client for that commission, and both the terms (%) of the commission and the amount (€/£) must be disclosed. In cases where the firm retains the commission, it must have the client’s written consent to do so. Consent to retain commission can be obtained in the client engagement letter. The Quality Assurance Committee views non-compliance with commission consent and disclosure requirements very seriously. Section 30 receipts (IBR 4.44-4.46) Firms must issue receipts when they receive client premiums or investment business clients’ money. Details of what must be included on the receipt are specified in IBR 4.45. Other matters Firms should ensure that they are aware of their category of IB authorisation and the limits of that category. Category IA2 is required to hold client premiums; Category IB2 is required to hold investment business clients’ money; and If handling or holding client premiums or investment business clients’ money, the firm must appoint an independent accountant and submit an independent accountant’s report to the Institute. Carrying on investment business, when not authorised to do so, is an offence under the Act. Firms may wish to review their category of investment business authorisation and assess whether it is suitable for their needs. Firms should refer to Schedule 1 to Chapter 1 of the IBRs for activities which may be undertaken under the various categories. For further details on the above matters, please look out for PSD’s forthcoming Regulatory Bulletin. For advice or support on the above matters, firms may contact, in strict confidence, the Practice Consulting Team, which is independent of the Professional Standards Department.

Oct 01, 2017
Audit

The Registry of Credit Unions (RCU) has recently uploaded the slides from its auditor roundtable held in July.  The slides are available on the RCU section of the Central Bank’s website.  Members should note that a number of the key issues raised at the roundtable are being addressed in the Credit Union Auditor Update event being held at Chartered Accountants House on Wednesday 27 September.  Presenters at the event include a representative of the RCU on the issue of reporting to the Registrar.  Please click here for more details on the event.

Sep 21, 2017
Information Technology

On 20 September 2017, despite traffic chaos and the early start we were delighted to welcome attendees to hear more about our upcoming Certificate in Cyber Security which is due to start in October 2017. This programme was developed in response to interest in this area from our members and the wider business world. We worked closely with KPMG to devise a curriculum and syllabus that will be relevant and interesting to all, no matter the aspects of interaction with data they may have. The programme can be taken by classroom or distance learning and will be taught by leading practitioners with technical and legal expertise. Speaking at the session and delivering the programme in October were Tony Hughes: (Associate Director, Risk Consulting, KPMG), John Harkness (Manager, Forensic Technology, KPMG) and Gordon Wade (Manager, Legal Services, KPMG). Each spoke of the content they will address in their respective areas across this four-module programme. You can see pictures from the presentation here. Cyber security is an ever-changing area that impacts on all of our daily working lives. Either by accident or malice, employees, technologies and systems can open our organisations up to a breach. This programme will give you the knowhow, overview and vocabulary to make you and your team more aware of risks and protections. Sole practitioners, small firms, multinationals, government departments…data and cyber security are paramount for maintaining legal compliance, revenue, reputation and confidence for staff and clients alike in organisations of all sizes. The  Certificate in Cyber Security will start in October 2017 and you can enrol now. More information about the programme is available here and you can contact us anytime for more information.

Sep 20, 2017
Audit

Chartered Accountants Ireland (‘the Institute’) has published the latest in its series of Technical Releases  – Technical Release 01/2017, Guidance for Auditors Reporting in Accordance with Investor Money Regulations for Fund Service Providers.  The purpose of this Technical Release is to provide guidance to auditors performing an assurance engagement pursuant to the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) Investor Money Regulations 2015 for Fund Service Providers (‘the IMR’).  The IMR came into effect on 1 July 2016 for fund service providers.  The Technical Release has been developed in consultation with the Central Bank of Ireland.    Technical Release 01/2017 sets out the principles underlying the work to be performed in providing an auditor report on an investor money examination.   It does not provide a checklist of specified procedures to be undertaken.  The auditor determines the appropriate procedures to be undertaken in the circumstances of the particular investor money engagement based on the requirements of ISAE 3000 and with the assistance of the Technical Release. Investor money examinations are highly specialised assurance engagements, requiring the auditor to maintain specific competence/expertise in the areas of: Controls assurance skills; Knowledge of the regulatory environment in which fund service providers holding investor money operate including the IMR and related guidance; Knowledge of products offered by fund service providers; Insolvency law. Technical Release 01/2017, Guidance for Auditors Reporting in Accordance with Investor Money Regulations for Fund Service Providers is available on the Institute’s website and will also be available on CHARIOT in due course.  

Jun 15, 2017