Companies Act 2014 section 1504

Initial actions to be taken after decision by recognised accountancy body that statutory auditor or audit firm of public-interest entity has committed relevant contravention

Section 1504 sets out the process that must be followed when a recognised accountancy body has found that a statutory auditor or audit firm of a public-interest entity has committed a relevant contravention, and how the matter is then referred to the Supervisory Authority for possible sanction.

• Where an accountancy body finds a statutory auditor or audit firm guilty of a contravention relating to a public-interest entity, and the appeal period has expired without a successful appeal, the body must promptly refer the matter — including investigation reports, relevant documents and details of the penalty it would have imposed — to the Supervisory Authority.
• The Supervisory Authority may request further information from the accountancy body, allowing at least 30 days for a response, and the body must comply with any such request.
• If the Supervisory Authority is satisfied that the contravention occurred, it may impose a relevant sanction on the auditor or audit firm, having regard to (but not being bound by) the penalty the accountancy body would have imposed; if not satisfied, it must notify the accountancy body in writing with reasons.
• Before commencing any investigation of a statutory auditor or audit firm concerning a public-interest entity audit, the accountancy body must first notify the Supervisory Authority and obtain its written consent before proceeding.

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