The ODCE and the professional accountancy bodies have developed a technical release TR 03/2016 on Reporting Company Law Offences: Information for Statutory Auditors. This has been updated in accordance with the Companies Act 2014.
Download the ODCE TECHNICAL RELEASE TR 03/2016
The purpose of this Technical Release is to assist the statutory auditor in applying judgements required to determine whether a duty to report to the ODCE arises under section 393 of CA 2014 and to highlight certain areas of company law in which, should a reportable offence occur, relevant information may come to the statutory auditor’s attention in the course of normal audit procedures. This Technical Release replaces IS 06/2009.
Duty to Report
Section 393(1) sets out the duty as follows:
“Where, in the course of, and by virtue of, their carrying out an audit of the financial statements of the company, information comes into the possession of the statutory auditors of a company that leads them to form the opinion that there are reasonable grounds for believing that the company or an officer or agent of it has committed a category 1 or 2 offence, the statutory auditors shall, forthwith after having formed it, notify that opinion to the Director and provide the Director with particulars of the grounds on which they have formed that opinion.”
Key Points from the Technical Release
- Sec 393 set out the duty of the statutory auditor who forms an opinion that a category 1 or 2 offence has been committed to report to the ODCE
- The Act defines offences into categories with categories 1 and 2 required to be reported to the ODCE
- The Act contain some new reportable offences and a number of offences are no longer reportable (old Sec 40)
- Section 3 of the technical release highlights the decision making process for the statutory auditor’s when forming an opinion of whether a duty to report an offence has occurred
- Highlights the implications for other reporting obligations including the Criminal Justice (Theft and Fraud Offences) Act, 2001, section 42 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, section 19 of the Criminal Justice Act 2011, section 1079 of the Taxes Consolidation Act, 1997 or in the case of a regulated entity a report may be required to a regulator such as the Central Bank of Ireland
- Sec 4 of the technical release sets out some examples of category 1 and 2 offences and where they could occur in a company:-
- Section 82: Financial assistance for acquisition of shares
- Section 248: Substantial property transactions / loans to directors or connected persons
- Section 286: Failure to keep adequate accounting records
- Section 291(9): Companies Act entity financial statements, Section 292(3): IFRS entity financial statements, Section 294(9): Companies Act group financial statements, Section 295(3): IFRS group financial statements
- Section 324(6): Approval of financial statements which do not give a true and fair view or otherwise comply with the requirements of the Companies Act 2014 / Article 4 of the IAS Regulation
- Section 324(8): Approval and signature of statutory financial statements by board of directors
- Section 330: Directors’ report: statement on relevant audit information (commencing for accounting years beginning on/after 1 June 2015)
- Section 355: Approval and signing of abridged financial statements
- Section 387: Delay in providing information to the statutory auditor
- Section 388: Right to information and explanations concerning subsidiary undertakings
- Section 389: Making false statements to the statutory auditor
- Section 406: False statements in returns, financial statements etc.
- Section 722: Fraudulent trading
- Section 876: Providing false information
- Section 877: Destruction, mutilation or falsification of book or document
- Section 878: Fraudulently parting with, altering or making omission in book or document
- Sections 1395 and 1396: Authorisation of Investment Companies by the Central Bank of Ireland
Please Note:
Our CLS Insights aims to bring you practical information and news on Company Law and Company Secretarial. We cover the topics that matter to your business and give practical tips and also the benefit our experiences. Please remember this article is a guide and legal advice should always be obtained. If you have any queries please contact one of the team and we would be happy to help.
Share this on...