Guidelines on new responsibilities for companies and their audit committees were published yesterday by the Office of the Director of Corporate Enforcement, Paul Appleby.
The obligations, enshrined in legislation, will apply to all publicly quoted companies, but will not be obligatory for major private companies.
Criminal failure to comply can lead to penalties, including fines or imprisonment for up to five years.
Mr Appleby said he has written to the Minister of State for Trade and Commerce, Michael Ahern, seeking the commencement of the relevant provision in section 42 of the Companies (Auditing and Accounting) Act 2003 as soon as possible.
The original intention was that the new auditing provisions would be obligatory for major private companies as well as public companies, but that was changed on foot of lobbying.
Major private companies with balance sheets exceeding €25 million and turnover in excess of €50 million will be obliged to establish audit committees with some or all of the new responsibilities, or to disclose the reasons for not doing so in their annual directors' reports.
The provision obliges companies to establish and adequately resource audit committees. The committees will have to determine if their company's accounts give a fair view of their company's affairs and recommend to the board whether the accounts should be approved. They will have to advise their company in relation to the company's auditor, monitor the auditor's work, including the level of independence of the auditor, and recommend if non-audit work should be awarded to the auditor.
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