Companies Act 2014 section 935C

Sanctions which Supervisory Authority or Director of Corporate Enforcement may impose

Section 935C sets out the sanctions that may be imposed by the Supervisory Authority (IAASA) or the Director of Corporate Enforcement on statutory auditors or audit firms for breaches of auditing requirements.

• The Supervisory Authority or the Director of Corporate Enforcement has the power to impose a range of sanctions on statutory auditors and audit firms found to be in breach of their obligations under the Companies Act 2014 and related EU audit regulations.
• This section was introduced by the European Union (Statutory Audits) Regulations 2016 (SI 312/2016) to give effect to the EU Audit Directive (2006/43/EC, as amended by Directive 2014/56/EU) and the EU Audit Regulation (No 537/2014).
• The section was subsequently amended by section 3(1)(d) of the Companies (Statutory Audits) Act 2018, which made modifications to the sanctioning framework.
• In practice, these sanctions serve as an enforcement mechanism to uphold audit quality and ensure that statutory auditors and audit firms comply with their professional and legal obligations when auditing company financial statements.

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