The current emergency situations in Ireland and the UK undoubtedly give rise to heightened risks and challenges to Institute firms and their compliance with their anti-money laundering (AML) obligations in both jurisdictions. Our colleagues in ICAEW have prepared useful information and guidance on the implications of the COVID-19 situation and AML issues.  While this material is written in a UK context, the guidance it sets out is also relevant to Ireland.  The ICAEW information can be accessed here.

The National Crime Agency (NCA) have uploaded the latest UKFIU SARs In Action magazine.  Click here for access.

  PSD recognises that regulatory compliance and associated issues may not currently be a high priority for firms.  Where firms are involved in specific regulatory or disciplinary processes, the Institute will work with you to find appropriate solutions and agree appropriate timelines for specific matters to be addressed.  We shall be adopting a reasonable and pragmatic approach to this.  Firms that are due a Quality Review visit in the near future will have been notified (or are in the process of being so) of the deferral of such ‘face to face’ visits.  PSD may suggest that such visits be conducted on a desktop or remote basis but only where this is appropriate and with the agreement of the firm.  Changes to authorisations/licensing requirements can be notified to authorisations@charteredaccountants.ie. If possible, please avoid sending in a hard copy.  We will do our best to respond to your queries as soon as possible but please be aware that there are likely to be delays due to the current disruption to normal work practices.  For general regulatory queries or information please email us at professionalstandards@charteredaccountants.ie.  

The UK Money Laundering Regulations (Reg 46(2)) require the Institute to provide an effective mechanism to allow reporting to the Institute of actual or potential breaches of the aml legislation. Should you suspect that a firm supervised by the Institute for aml purposes is not complying with aml legislation you may contact the Institute via the AML Confidential Disclosure Form. You do not have to disclose your personal details, although should the Institute wish to clarify any information, contact details would be helpful. Irish aml legislation does not provide a specific requirement for the Institute to provide a similar mechanism but should  you suspect that a supervised  firm in Ireland is not complying with aml legislation you may also disclose the information via the AML Confidential Disclosure Form. For more information

On 31 January  2020 the UK left the EU under the terms of the withdrawal agreement and commenced a transition period, which is currently expected to end on 31 December 2020.  The FRC and Department for Business, Energy and Industrial Strategy (BEIS) in the UK have published joint letters for accountants and auditors with information regarding auditing, accounting and corporate reporting standards in the UK during the transition period following the UK's exit from the EU.  The letter to auditors confirms that auditors who are members of Chartered Accountants Ireland will continue to have their audit qualification recognised in the UK during and after the transition period as Chartered Accountants Ireland is a professional body recognised in this regard in the UK.  The letters are available to read on the FRC's website here. The Institute is working with the Institute of Chartered Accountants in England and Wales ('ICAEW') and the Institute of Chartered Accountants of Scotland ('ICAS') to develop Audit Regulations which will apply to auditors authorised by members of those bodies in the UK after the transition period.

Please be advised that notification emails will be issued in the week commencing 17 February in respect of firm's regulatory fees for 2020.

The Institute’s Code of Ethics for members has been revised and restructured and this revised Code will take effect from 1 March 2020 replacing the current Code of Ethics (effective September 2016). The revised Code of Ethics is available to read here. The Institute’s Code of Ethics has been closely aligned for many years to the Code of Ethics issued by the International Ethics Standards Board for Accountants (‘IESBA’).  In 2018 IESBA finalised a significant project to clarify and restructure its Code of Ethics.  IESBA’s primary intention behind this restructuring of the Code was not to fundamentally change the substance of the Code, but to improve clarity and navigation.  Some key features of the restructuring include: a more consistent approach to each section, including separating out material into requirement paragraphs and related application material; reordering material, dividing larger sections and including more sub headings; simplifying the more complex sentences; changing numbering to clarify the intent of each paragraph, and to allow for further changes without having to renumber existing material; and Introducing a “Guide to the Code” to explain how it works. The Institute’s Code of Ethics has now been revised to align with the restructured IESBA Code and so the format and layout of the revised Institute Code of Ethics will look completely different to members.  To help members become familiar with the revised Code of Ethics we have made available a table of destinations which shows where each paragraph in the 2016 Code appears in the revised 2020 Code.  This table of destinations can be accessed here. The new structure, compared to the old structure, is as follows: Revised Code of Ethics for members of Chartered Accountants Ireland (effective 1 January 2020) Extant (‘old’) Code of Ethics for members of Chartered Accountants Ireland (effective 30 September 2016) Guide to the Code This is a new section in the revised Code of Ethics Part 1 – Complying with the Code, Fundamental Principles and Conceptual Framework Sections 100–120 Part A – General application of the Code Sections 100-150 Part 2 –Professional Accountants in Business Sections 200-299 Part C – Professional Accountants in Business Sections 300-350 Part 3 –Professional Accountants in Public Practice Sections 300-399 Part B– Professional Accountants in Public Practice Sections 200-280 Part 4A – Independence for Audit and Review Engagements* Sections 400-800 Part B – Professional Accountants in Public Practice Sections 290 Part 4B – Independence for Assurance Engagements other than Audit and Review Engagements Sections 900-990 Part B – Professional Accountants in Public Practice Sections 291 Part 5** - Applicable to Insolvency Practitioners Part D – The Practice of Insolvency Section 400  *        The Institutes’ Code of Ethics does not apply to the performance of statutory audit work.  Independence and other ethical requirements for auditors are contained in the Ethical Standard for Auditors issued by the FRC and IAASA in the UK and Ireland respectively. **     The revision of the part of the Code of Ethics applicable to the practice of insolvency is still ongoing and is expected to be published in the first half of 2020.  Non- IESBA content – ‘add-on’ material The Institute’s Code of Ethics has historically contained ‘add-on’ material (shown in italics in the Institute’s Code) over and above the provisions of the IESBA Code of Ethics.  Where the revised IESBA Code of Ethics now addresses the matters included in Institute ‘add-on’ material or where the add-on material has been assessed to be descriptive in nature rather than core to the Code of Ethics,  such ‘add-on’ material has been removed as part of the revision project.  The revised Institute Code of Ethics is now closer than ever to the IESBA Code of Ethics.   Removed ‘add-on’ material which is considered useful but not core to the Code has been made available for members in a series of Ethics Releases on the following topics: Code of Ethics and changes in professional appointments; Code of Ethics and confidentiality; Code of Ethics and corporate finance advice; Code of Ethics and marketing.  These Ethics Releases are available in the Institute’s online Ethics Resource Centre. Key developments in the revised Code As well as the significant restructure there have been some enhancements of the content in the revised Code of Ethics although there is no fundamental change to ethical requirements.  These include the following: “Guide to the Code” This new introductory section does not form part of the Code but provides some useful information on the purpose of the Code, it’s structure and how it is to be used. Enhanced and overarching conceptual framework There is a clear emphasis on the fundamental ethical principles and the use of the conceptual framework for applying those principles underlying every section of the Code.  In this context there is also new guidance to emphasize the importance of understanding facts and circumstances when exercising professional judgment and new guidance to explain how compliance with the fundamental principles supports the exercise of professional skepticism in an audit or other assurance engagements. Safeguards Revised ‘safeguards’ provisions better align to threats to compliance with the fundamental principles.  A new definition of ‘safeguards’ clarifies that ‘safeguards’ are specific actions (no longer ‘actions or measures’) to be taken to reduce threats.  Additional guidance is provided in the revised Code of Ethics in relation to example ‘safeguards’. Application of relevant Code provisions to all professional accountants Clear guidance that relevant provisions for professional accountants in business are also applicable to professional accountants in practice, in the context of their role other than when providing professional services to clients.  The converse also applies where appropriate.  This is not a change to requirements of the Institute’s 2016 Code of Ethics but rather provides clarification as to how the provisions of the Code apply. Professional accountants in business (‘PAIBs’) New and revised sections dedicated to PAIBs relating to: preparing and presenting information (extended new section 220); and dealing with pressure to breach the fundamental principles (new section 270) These changes add additional explanation to existing requirements in the Institute’s 2016 Code of Ethics and have, for the most part, been regarded as implicit in the 2016 Code.   Non-compliance with laws and regulations (‘NOCLAR’) Dedicated sections on non-compliance with laws and regulations (‘NOCLAR’) (new sections 260 and 360).  The 2016 Code of Ethics includes specific permission to breach confidentiality in the public interest and so the NOCLAR provisions can be seen as a change of detail, rather than of substance.  The new sections provide additional guidance in this area. Inducements Additional guidance is provided in relation to the threats posed by gifts and hospitality and more broadly now referred to as inducements.  The revised Code of Ethics introduces an ‘intent’ test.   The acceptance of any inducement which is offered with an intent to influence inappropriately is prohibited whereas there may be possible safeguarding actions to take in relation to inducements where there is no intent to influence inappropriately.

The latest publication from the UK Financial Intelligence Unit (UKFIU) titled the 'SARs Reporter Booklet' contains a sanitised summary of feedback from law enforcement agencies (LEAs) on their use of SARs and includes pertinent information and updates from the UKFIU. The UKFIU sits within the National Crime Agency (NCA) and receives over 470,000 SARs a year. This Booklet highlights the work of LEAs in utilising SAR intelligence to initiate investigations and informing existing ones. More information about the UKFIU, the SARs regime and further guidance notes can be found at the NCA website with helpful Guidance Notes reproduced below. Submitting A Suspicious Activity Report (SAR) within the Regulated Sector – Guidance Note Introduction to Suspicious Activity Reports (SARs) – Guidance Note

In the Professional Standards Regulatory Bulletin (December 2019) we informed you that the 5th Anti Money Laundering Directive had been transposed into UK legislation by The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 effective from 10 January 2020.  (We still await implementation of the draft legislation for Ireland.) Full Article: The 5th Anti Money Laundering Directive

PSNI has developed a checklist for local businesses to help prevent businesses being a victim to cybercrime attacks.  This one page checklist provides useful tips for both accountancy firms and their business clients. Further information and online safety advice can be obtained from www.ncsc.gov.uk and www.getsafeonline.org.

The Individual Regulatory Fee  invoice for 2020 is now available online at the Myaccount portal of the website. NB: The Firm Regulatory Fee invoice will be available late January, notification will be issued in due course.

HM Treasury has transposed the Fifth Money Laundering Directive into UK legislation by the enactment of The Money Laundering and Terrorist Financing (Amendment) Regulations 2019.  The 2019 Regulations will come into force on 10 January 2020. CCAB AML Working Party is currently updating the AML Guidance for the Accountancy Sector to incorporate these latest changes and we will publish this when available.

Please be advised that Regulatory Fees for the year 2020 will be issued during the month of January 2020.  Notification will be sent from Professional Standards when these are available for payment.

Please be reminded that Individual Annual Returns are available for completion via the following link - https://individualannualreturn.charteredaccountants.ie/Login.aspx These were due to be received by 31 October 2019. Two reminders have since been issued and the final reminder is due to be sent on 10 December 2019.  If you have yet to submit your IAR, we would encourage you to do so as soon as possible to avoid receiving a final reminder letter.

The Chartered Accountants Ireland ("the Institute") is aware that there have been some changes in the Professional Indemnity Insurance (PII) market over the last 12-18 months which would mean that firms find it more challenging (or time consuming) to renew cover than they have previously.  It could also mean that firms find that their premiums increase.  It is unclear whether this is a 'hardening' of the market or price correction, but the Institute understands that insurers are reviewing more critically the risks they are willing to accept and the price they will set cover for.  This may affect, in particular, firms with a claims/notifications history; those involved in ongoing legal action and/or firms engaged in activity which insurers perceive as more 'high risk' (e.g. tax mitigation schemes, investment advice, insolvency, M&A work). The Institute understands that the market for accountants' PII could be particularly limited in Q4 of 2019 as some insurers cease to write new policies or renew business during the final months of the year.  As always, the Institute recommends that firms prepare early for their renewal and that they take advice from a trusted and reputable broker or other advisor in taking out their insurance.  It is recommended that firms discuss their placement strategy with their broker to ensure that they have access to a number of different insurers. Firms have an obligation to make a fair presentation of the risk on taking out or renewing cover.  Therefore, in order to safeguard the indemnity available for a claim should it arise, it is essential that firms are open and transparent with their insurer / prospective insurer when taking out or renewing cover as to: The activities they undertake; Their claims history and any potential claims (or grounds to suspect a claim - 'circumstances'); Their disciplinary / regulatory history.

Revised Audit Regulations – effective 1 January 2020 The Institute’s Audit Regulations and Guidance (‘the Audit Regulations’) have been updated to reflect the requirements of the Companies Act 2014 following amendment by the Companies (Statutory Audits) Act 2018 (‘the 2018 Act’).   The revised Audit Regulations will take effect from 1 January 2020 and replace the current Audit Regulations which have been in effect since 1 April 2017.   The revised Audit Regulations and Guidance is now available to read here. The majority of the provisions of the 2018 Act were previously reflected in Irish law by S.I. 312 of 2016[1] and so are already addressed in the current Audit Regulations.    The key changes in the revised Audit Regulations are: Change in the eligibility criteria for firms with Irish audit registration This amendment of Audit Regulation 2.03 reflects the requirements of s.1473 of the Companies Act 2014 and relates to the composition of the body which is responsible for the management and administration of the firm.   Going forward, the management body of a firm with Irish audit registration must be composed of a majority of members (by headcount rather than voting rights) who hold the appropriate audit qualification.  The management body is whatever group is responsible for the administration and management of the firm.  This body could be a separate management board but does not have to be. The Institute’s Professional Standards Department (‘PSD’) recently wrote to audit compliance principals to inform them of this change and advise firms who do not currently meet these revised control criteria to begin to address this issue if the firm wishes to continue to be included on the Irish audit register.     Audit compliance principals with any queries on this issue can contact aq@charteredaccountants.ie for assistance. CPD requirements for responsible individuals There is an increased emphasis at Audit Regulation 3.17 and new Audit Regulation 3.17A on the requirement for every responsible individual to undertake appropriate audit related CPD.  Legal references The revised Audit Regulations have updated legal references to refer to the Companies Act 2014 (as amended) instead of S.I.312 of 2016 where appropriate.  Public auditor a concept of the past All references to ‘public auditor’ have been removed from the revised Audit Regulations as the 2018 Act removed this concept from Irish company law.   [1] European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No. 537/2014) Regulations 2016  

The UKFIU has published the third edition of the UKFIU’s magazine “SARs in Action”.  We recommend that practitioners read this informative document. In particular, page 10, discusses how the Northern Ireland Environment Agency works with HMRC to discuss and share information regarding environmental taxes and investigations.

The UKFIU has published the Suspicious Activity Reports (SARs) Annual Report 2019. The UKFIU received and processed a record number of SARs (478,437), with a 52.72% increase in requests for a Defence Against Money Laundering (DAML) (34,543). The Report highlights that the number of SARs from accountants remains low, with accountants and tax advisers submitting 1.06% of the total submitted in 2018/19. The case studies on page 12 demonstrate the value of SARs intelligence in tackling a wide range of crimes.

Transparency International published a new report today which investigates how UK businesses and institutions help corrupt individuals and regimes launder their money. You can find the report here: https://www.transparency.org.uk/publications/at-your-service/

CCAB has published the draft Supplementary Anti-Money Laundering Guidance for Insolvency Practitioners (IPs).  This is draft guidance pending approval from HM Treasury. IPs should refer to the Main Body Guidance (the Guidance) for detailed information about AML legislation and associated offences, and comprehensive guidance on compliance with the various requirements imposed by the legislation. This draft Appendix is concerned principally with matters that are particular to those acting as IPs.   This draft AML Guidance for IPs covers the UK legislation but many aspects of this guidance will also be relevant to IPs in Ireland.

Your Individual Annual Return 2019 is available for completion online.  Please ensure it is submitted by 31 October 2019. Click here for your Individual Annual Return.