Professional qualifications

Recognition of your Chartered Accountancy qualification

The UK’s departure from the EU results in some changes in the standing of the Irish ACA qualification. This article deals with the matter of the qualification’s standing in terms of Irish and UK law. 

Institute standing

Our Institute was created prior to partition, and the Institute has been an all-island body ever since.  The Institute is recognised in law in both the UK and Ireland under the 1966 Chartered Accountants Act. 

EU Qualifications Directive (Directive 2005/36/EU)  

The Qualifications Directive is designed to ensure that Member States cannot create artificial barriers to the recognition of citizens’ professional qualification when moving from one EU state to another as this is counter to the EU ‘single market’. 

Students/Members: Republic of Ireland  

Members or students who are EU citizens and who have qualified and gained the requisite experience in the EU prior to the end of the transition period, will experience no change in their rights and protections under this Directive.  They will continue to be covered by the EU Qualifications Directive (Directive 2005/36/EU).   

Students/Members:  Northern Ireland 

Students gaining the Irish qualification in NI/UK post Brexit will be receiving a European qualification awarded in a third country.

Members who are UK citizens (or other non-EU citizens), who qualified in NI/UK prior to the transition period and who have met the required EU-based experience requirements, will no longer be able to access the rights under the EU Qualifications Directive as they are not EU citizens under this Directive. 

It is worth noting that the number of our members living in mainland European countries is relatively small, so the impact of these changes is not likely to be significant.  

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Common Travel Area - Irish and UK law

The Irish ACA qualification continues to be recognised in Irish and UK law and members on both sides of the border continue to have mobility rights under the Common Travel Area (CTA) agreement. Additionally, members of this Institute will continue to have access to practice rights on both sides of the border. The CTA rights precede the entry of the UK into the EU, and thus remain in place.

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Audit Qualification 

Brexit is also impacting the Audit Qualification (AQ). The AQ award confirms that the member has met the educational requirements for becoming an auditor and is one of the criteria necessary when a member wishes to gain access to audit practicing rights. It is also relevant in terms of ownership rights. 

From January 2021, following consultation with both regulators, a new AQ regime will come into place.  

Members in the Republic of Ireland

  • Persons admitted to membership who continue to meet the eligibility criteria for the audit qualification will be eligible to apply for the AQ.
  • These persons, if awarded, will be eligible ultimately to gain audit practice rights in Ireland and the UK.

Members in Northern Ireland/UK

  • For persons admitted to membership and who continue to meet the eligibility criteria for the audit qualification, the regime will remain as at present with the automatic award of the AQ, and
  • if awarded, these persons will be eligible ultimately to gain audit practice rights in Ireland and the UK, provided they meet the criteria under both the Companies Act 2014 and Companies Act 2006.  The AQ award of members who do not meet the eligibility criteria under the Companies Act 2014 will be limited to NI/UK jurisdiction.

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Implications for audit registration

The important news for auditors and audit firms registered by this Institute is that the status quo will continue for the majority of firms in both Ireland and the UK from 1 January 2021.

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Irish audit registration – after the Brexit transition period

Since 2018, Brexit has cast uncertainty over the position of ‘UK-based’ (however interpreted) auditors registered by the Institute vis-à-vis eligibility to audit Irish entities post Brexit. The Institute has kept members informed of any developments in this regard and has outlined our position, i.e. that there is no basis for the Institute to remove its ‘UK-based’ auditors from the Irish audit register as a consequence of Brexit unless there is a change in Irish company law or a formal direction from IAASA to the Institute.

Recent engagement with IAASA has confirmed that there will not be any legislative change or regulatory direction in this regard. Therefore, the status quo continues in Ireland from 1 January 2021 for the Institute’s UK-based auditors and audit firms, as long as those individuals and firms continue to meet the eligibility criteria (unchanged) set out in the Institute’s Audit Regulations and in the Companies Act 2014. The Professional Standards department will be writing to audit compliance principals of statutory audit firms in more detail in the coming weeks.

It is welcome news for the auditors and audit firms registered by the Institute in Ireland and based outside of the jurisdiction, that there will be no change to their status on the Irish audit register from January 2021. In the longer term, however, Brexit may impact on the number of UK-based firms on the Irish audit register as the audit regulatory requirements in Ireland and the UK continue to diverge over time.  Audit firms that are registered in Ireland but do not have any Irish audit clients may find that the burden of complying with distinctly Irish regulatory requirements is no longer worthwhile and may choose to cease their Irish audit registration.

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Related matters regarding Irish audit registration

While not of direct relevance to Institute members and audit firms, it is worth mentioning that Irish company law provides a mechanism for approval of third-country auditors in Ireland. From 1 January 2021 auditors based in the UK who are not members of the Institute or another Recognised Accountancy Body will have to avail of this mechanism if they want to be eligible to audit Irish entities.

The Companies Act 2014 in Ireland provides for the approval of third-country auditors as Irish statutory auditors where certain criteria are met. These criteria include the existence of reciprocal arrangements regarding auditor approval between Ireland and the third country concerned, as well as the completion of an aptitude test by the third-country auditor. The Companies Act 2014 also allows for exemption from that aptitude test to be granted in certain circumstances. We understand that IAASA and the Financial Reporting Council (‘FRC’) in the UK are working on developing reciprocal arrangements which would support the operation of a regime in Ireland for approving third-country auditors from the UK. The Institute currently administers an aptitude test for third-country auditors and is engaging with IAASA in relation to guidelines for granting exemptions from the aptitude test.

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UK audit registration – after the Brexit transition period

After 31 December 2020, audit registration in the UK will continue without interruption for individual statutory auditors (responsible individuals) registered by Chartered Accountants Ireland given the status of the Institute as a Recognised Supervisory Body (‘RSB’) in the UK, regardless of whether the responsible individual is based in the UK or Ireland.

There will be no change to the UK audit registration of the majority of audit firms registered in the UK by Chartered Accountants Ireland regardless of whether the audit firm is based in Ireland or in the UK. Audit firms currently registered in the UK by the Institute can retain UK audit registration after 31 December 2020 if the UK firm ownership rules are met. The ownership rules for a UK-registered audit firm after 31 December 2020 will require that the majority of the voting rights on the ownership body and management body of the firm are held by:

  • Individuals holding an audit qualification from a UK RSB (including Chartered Accountants Ireland),
  • Audit firms approved by a UK RSB (including Chartered Accountants Ireland),
  • Individuals who hold EEA qualifications, who have passed or applied to sit a relevant aptitude test by 31 December 2020.

The change in the ownership rules impacts firms who count EEA qualified auditors (who are not qualified by a UK RSB) and EEA audit firms in their majority of qualified owners and managers. From 1 January 2021 the qualified majority of owners and managers can only include EEA auditors (who are not qualified by a UK RSB) if the EEA auditors have applied for, or passed, a relevant aptitude test before 31 December 2020. This change may affect a small number of firms.

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