Companies Act 2014 section 934AA

Interim direction required to protect public

Section 934AA sets out the power of the Supervisory Authority to issue interim directions to auditors or accountants where a possible serious breach of professional standards requires immediate protective measures in the public interest.

• The Supervisory Authority can impose interim restrictions on an auditor's work — including requiring independent review of audit files, mandatory notification of new engagements, or prior approval before accepting new engagements — where the gravity of a possible contravention warrants public protection.
• Before issuing an interim direction, the Authority must give advance notice specifying the alleged breach and the proposed requirements, and allow the person 21 days to make representations, after which the Authority has a further 21 days to decide whether to proceed.
• An interim direction takes effect from the date of issue and expires at the earliest of: the Authority reaching a final decision on the matter, 18 months after issue, or the Authority withdrawing it — with mandatory reviews of whether to withdraw taking place at least every six months.
• The person subject to an interim direction may request its withdrawal at any time by presenting new information, may appeal to the court while the direction remains in effect, and the Authority retains the power to issue a fresh interim direction after a previous one has expired.