S.I. No. 336/2024 - European Union (Corporate Sustainability Reporting) Regulations 2024

1612. (1) A statutory auditor or statutory audit firm shall maintain a client account record that includes the following data for each assurance client:

• (a) the name, address and place of business;

• (b) in the case of a statutory audit firm, the name of the key sustainability partner;

• (c) the fees charged for the assurance of sustainability reporting and the fees charged for other services in any financial year.

• (2) A statutory auditor or a statutory audit firm shall create an assurance file for each assurance engagement which shall be closed not later than 60 days after the date of signature of the assurance report.

• (3) A statutory auditor or a statutory audit firm shall document and retain at least the data recorded pursuant to section 1539 as applied by section 1621 as regards the assurance of sustainability reporting.

• (4) A statutory auditor or a statutory audit firm shall retain any other data and documents that are of importance in support of the assurance report and for monitoring compliance with this Part, the Audit Directive and other applicable legal requirements as regards the assurance of sustainability reporting.

• (5) A statutory auditor or a statutory audit firm shall keep records of any complaints made in writing about the performance of the assurance of sustainability reporting carried out by him or her.

• (6) Where the same statutory auditor carries out the statutory audit of annual financial statements and the assurance of sustainability reporting of an applicable company, the assurance file referred to in subsection (2) may be included in the audit file referred to in section 1543(2).

Assurance report on sustainability reporting

1613. (1) The statutory auditor or statutory audit firm shall present the results of the assurance of sustainability reporting in an assurance report on sustainability reporting (in this Part referred to as the ‘assurance report’) which shall be prepared in accordance with the assurance standards referred to in section 1610.

• (2) The assurance report shall be in writing and shall:

• (a) identify the entities whose sustainability reporting or consolidated sustainability reporting is the subject of the assurance engagement;

• (b) specify the sustainability reporting concerned and the date and period it covers;

• (c) identify the sustainability reporting framework that has been applied in its preparation;

• (d) include a description of the scope of the assurance of sustainability reporting which shall, as a minimum, identify the assurance standards in accordance with which the assurance of sustainability reporting was conducted.

• (3) The assurance report shall state clearly the statutory auditors’ opinion, based on a limited assurance engagement, as regards the compliance of the sustainability reporting of the applicable company with the requirements of this Part, including –

• (a) the compliance of the sustainability reporting with the sustainability reporting standards adopted by the Commission pursuant to Article 29b or Article 29c of the Accounting Directive,

• (b) the process carried out by the applicable company to identify the information reported pursuant to those sustainability reporting standards,

• (c) the compliance with the requirement to mark-up sustainability reporting in accordance with section 1600, and

• (d) the compliance with the reporting requirements provided for in Article 8 of Regulation (EU) 2020/852.

• (4)
• (a) Where the assurance of sustainability reporting was carried out by more than one statutory auditor or statutory audit firm, the statutory auditors or audit firms shall, subject to paragraph (b), agree on the results of the assurance of sustainability reporting and submit a joint assurance report and opinion.

• (b) In the case of disagreement, each statutory auditor or statutory audit firm shall submit his, her or its opinion in a separate paragraph of the assurance report and shall state the reason for the disagreement.

• (5)
• (a) The assurance report shall be signed and dated by the statutory auditor carrying out the assurance of sustainability reporting.

• (b) Where a statutory audit firm carries out the assurance of sustainability reporting, the assurance report shall bear the signature of at least the statutory auditors carrying out the assurance of sustainability reporting on behalf of the audit firm.

• (c) Where more than one statutory auditor or statutory audit firm have been simultaneously engaged, the assurance report shall be signed by all statutory auditors or at least by the statutory auditors carrying out the assurance of sustainability reporting on behalf of each audit firm.

• (6) Where the same statutory auditor carries out the statutory audit of annual financial statements and the assurance of sustainability reporting of an applicable company, the assurance report may be included as a separate section of the statutory auditors’ report required by section 391.

Assurance of consolidated sustainability reporting

1614. (1) In the case of an assurance engagement concerning the consolidated sustainability reporting of a group, the group auditor shall bear the full responsibility for the assurance report.

• (2) The group auditor shall –

• (a) evaluate the assurance work carried out by any auditors for the purpose of the assurance of sustainability reporting of the group, and

• (b) document the nature, timing and extent of the work carried out by those auditors, including the group auditor’s review of the relevant parts of those auditors’ assurance documentation.

• (3) For the purposes of the assurance of consolidated sustainability reporting of a group, auditors may be one or more of the following:

• (a) statutory auditors;

• (b) statutory audit firms;

• (c) Member State auditors;

• (d) Member State audit firms;

• (e) third-country auditors;

• (f) third-country audit entities;

• (g) independent assurance services providers.

• (4) The group auditor shall carry out a review, and maintain documentation of such review, of the work of whoever referred to in subsection (3) performed assurance work for the purposes of the assurance of consolidated sustainability reporting of the group.

• (5) The documentation referred to in subsections (2)(b) and (4) to be retained by the group auditor shall be such as enables the Supervisory Authority, or the recognised accountancy body, where applicable, to conduct a quality assurance inspection or review, as the case may be, pursuant to Chapter 7.

• (6) The group auditor shall request the agreement of the auditors referred to in subsection (3) to transfer relevant documentation during the carrying out of the assurance of consolidated sustainability reporting as a condition of the reliance by the group auditor on the work of such auditors.

• (7)
• (a) Where the group auditor is unable to secure an agreement referred to in subsection (6), he or she shall take appropriate measures in order to form an opinion on the consolidated sustainability reporting of the group and inform the Supervisory Authority or the recognised accountancy body, where applicable.

• (b) Such measures shall, as appropriate, include carrying out additional assurance work, either directly or by outsourcing the additional assurance work, in the relevant subsidiary.

• (8)
• (a) The group auditor who is subject to a quality assurance inspection or review or an investigation concerning the assurance of the consolidated sustainability reporting of a group shall, when requested, make available to the Supervisory Authority or the recognised accountancy body, where applicable, the relevant documentation he or she has retained concerning the assurance work performed by the entities referred to in subsection (3) for the purpose of the assurance of consolidated sustainability reporting of the group, including any working papers relevant to the assurance of consolidated sustainability reporting.

• (b) The Supervisory Authority may request additional documentation on the assurance work performed by a statutory auditor or audit firm for the purpose of the assurance of consolidated sustainability reporting from the competent authorities in other Member States, where applicable, pursuant to Chapter 17 of Part 27 as applied by section 1647.

Further responsibility of group auditor in relation to assurance of sustainability reporting

1615. (1) Subject to subsection (2), the Supervisory Authority may request additional documentation on the assurance work performed by any third-country auditor or third-country audit entity on a holding undertaking or on a subsidiary undertaking of a group from the relevant competent authorities in third countries through the working arrangements referred to in section 1568(1)(c) or 1569(c) as applied by section 1648.

• (2) Where –

• (a) an assurance of consolidated sustainability reporting of a group is carried out, and

• (b) the assurance of sustainability reporting of a holding undertaking or subsidiary undertaking of the group is carried out by one or more third-country auditors, third-country entities or independent assurance services providers that have no working arrangements as referred to in section 1568(1)(c) or 1569(c),

the group auditor is responsible for ensuring proper delivery, when requested, to the Supervisory Authority of the additional documentation of the assurance work performed by those third-country auditors, third-country entities or independent assurance services providers, including the working papers relevant to the assurance of sustainability reporting of the group.

• (3) To ensure such delivery, the group auditor shall retain a copy of such assurance documentation, or alternatively –

• (a) agree, with one or more third-country auditors, third-country entities or independent assurance services providers, arrangements for the group auditor’s proper and unrestricted access, upon request, to the documentation, or

• (b) take any other appropriate action.

• (4) Where the assurance working papers cannot, for legal or other reasons, be passed from a third country to the group auditor, the documentation retained by the group auditor shall include –

• (a) evidence that he or she has undertaken the appropriate procedures in order to gain access to the assurance documentation, and

• (b) in the case of an impediment other than a legal one arising from legislation of the third country or countries concerned, evidence supporting the existence of such an impediment.

Audit committees for public-interest entities – responsibilities in relation to assurance of sustainability reporting

1616. Without prejudice to section 1551 and the responsibility of the directors of a public-interest entity, the responsibilities of an audit committee established pursuant to that section for an applicable company shall include –

• (a) informing directors of the entity of the outcome of the assurance of sustainability reporting and explaining how the assurance of sustainability reporting contributed to the integrity of the sustainability reporting and what the role of the audit committee was in that process,

• (b) monitoring the sustainability reporting process of the undertaking, including its electronic reporting process as referred to in section 1600 and the process carried out by the undertaking to identify the information reporting in accordance with the sustainability reporting standards, and submitting recommendations or proposals to the directors of the entity to ensure its integrity,

• (c) monitoring the effectiveness of the entity’s internal quality control and risk management systems and, where applicable, its internal audit, regarding the sustainability reporting of the undertaking, including its electronic reporting process as referred to in section 1600, without breaching its independence,

• (d) monitoring the assurance of the entity and group sustainability reporting, in particular its performance, taking into account any findings and conclusions by the Supervisory Authority pursuant to Article 26(6) of Regulation (EU) No 537/2014, and

• (e) reviewing and monitoring the independence of the statutory auditors or audit firms carrying out the assurance of sustainability reporting of the entity in accordance with section 1621.

Resolution for accredited third party to prepare report on certain elements of sustainability reporting

1617. (1) Subject to subsection (3), in the case of an applicable company falling within paragraph (a) of the definition of ‘applicable company’ that is subject to the requirements of section 1590 or 1596, shareholders representing 5 per cent or more of the voting rights or of the share capital of the company, acting individually or collectively, shall have the right to table a draft resolution to be adopted in the annual general meeting of the company, requiring an accredited third party that does not belong to the same audit firm or network as the statutory auditor or audit firm carrying out the statutory audit to prepare a report on certain elements of the sustainability reporting and that such report be made available to the annual general meeting.

• (2) Where an applicable company is required to have elements of its sustainability reporting verified by an accredited independent third party, the directors of the applicable company shall ensure that the report of the accredited independent third party is either –

• (a) annexed to the directors’ report of the company for the financial year concerned, or

• (b) published on the company’s website.

• (3) This section does not apply to a public-interest entity falling within paragraph (a) of the definition of ‘public-interest entity’.

Prohibited non-audit services in case of assurance of sustainability reporting of public-interest entity

1618. (1) A statutory auditor or statutory audit firm carrying out the assurance of sustainability reporting of a public-interest entity, or any member of the network to which the relevant sustainability assurance provider belongs, shall not directly or indirectly provide to the public-interest entity that is the subject of the assurance of sustainability reporting, to its holding undertaking or to its controlled undertakings within the European Union, the prohibited non-audit services referred to in points (b) and (c) and points (e) to (k) of the second subparagraph of Article 5(1) of Regulation (EU) No 537/2014 during –

• (a) the period between the beginning of the period subject to the assurance of sustainability reporting and the issuing of the assurance report, and

• (b) the financial year immediately preceding the period referred to in paragraph (a) in relation to the services referred to in point (e) of the second subparagraph of Article 5(1) of Regulation (EU) No 537/2014.

• (2) A statutory auditor or statutory audit firm carrying out the assurance of sustainability reporting of a public-interest entity and, where the statutory auditor or statutory audit firm belongs to a network, any member of such network, may provide to the public-interest entity that is the subject of the assurance of sustainability reporting, to its holding undertaking or to its controlled undertakings, non-audit services other than the prohibited non-audit services referred to in subsection (1) or, if applicable, the prohibited non-audit services referred to in the second subparagraph of Article 5(1) of Regulation (EU) No 537/2014 or services considered by Member States to represent a threat to independence as referred to in Article 5(2) of that Regulation, subject to the approval of the audit committee after it has properly assessed threats to independence and the safeguards applied in accordance with sections 1538 and 1539.

• (3) When a member of a network to which the statutory auditor or statutory audit firm belongs provides the prohibited non-audit services referred to in subsection (1) to an undertaking incorporated in a third country which is controlled by the public-interest entity that is the subject of the assurance of sustainability reporting, the statutory auditor or audit firm concerned shall assess whether his, her or its independence would be compromised by such provision of services by the member of the network.

• (4) If his, her or its independence is affected, the statutory auditor or audit firm –

• (a) shall apply safeguards in order to mitigate the threats caused by the provision of prohibited non-audit services referred to in subsection (1) in a third country, and

• (b) may continue to carry out the assurance of sustainability reporting of the public-interest entity only if he, she or it can justify, in accordance with sections 1538 and 1539, that the provision of such services does not affect his, her or its professional judgement and the assurance report on sustainability reporting.

Restrictions with regard to fees

1619. (1) A recognised accountancy body shall ensure that its standards include provisions that fees for the assurance of sustainability reporting –

• (a) are not to be influenced by, or determined by, the provision of additional services to the undertaking that is the subject of the assurance of sustainability reporting, and

• (b) are not to be based on any form of contingency.

• (2) In this section, ‘standards’ has the same meaning as it has in Part 27.

Confidentiality and professional secrecy

1620. The rules of confidentiality and professional secrecy in Chapter 11 of Part 27 shall apply with respect to information and documents to which a statutory auditor or audit firm has access when carrying out the assurance of sustainability reporting in the same manner as they apply in relation to the carrying out of a statutory audit subject to the following modifications:

• (a) references (howsoever expressed) to carrying out a statutory audit shall be construed as references to carrying out the assurance of sustainability reporting;

• (b) references (howsoever expressed) to a statutory auditor or audit firm ceasing to be engaged in an audit shall be constructed as references to a statutory auditor or audit firm ceasing to be engaged in the assurance of sustainability reporting of the company;

• (c) references to a key audit partner shall be construed as references to a key sustainability partner;

• (d) references to audit work shall be construed as references to assurance work;

• (e) references to audit working papers or other documents relating to the audit shall be construed as references to assurance working papers or other documents relating to the assurance of sustainability reporting;

• (f) references (howsoever expressed) to the audited undertaking shall be construed as references to the applicable company the subject of the assurance of sustainability reporting;

• (g) any other necessary modifications.

Independence, objectivity and professional scepticism

1621. The requirements of independence, objectivity and professional scepticism in sections 1533 to 1541 shall apply to statutory auditors or audit firms carrying out the assurance of sustainability reporting in the same manner as they apply to statutory auditors or audit firms carrying out a statutory audit, subject to the following modifications:

• (a) references (howsoever expressed) to carrying out a statutory audit shall be construed as references to the carrying out of the assurance of sustainability reporting;

• (b) references to the key audit partner shall be construed as references to the key sustainability partner;

• (c) references (howsoever expressed) to the audited undertaking shall be construed as references to the applicable company the subject of the assurance of sustainability reporting;

• (d) references to audit working papers shall be construed as references to assurance working papers;

• (e) any other necessary modifications.

Irregularities

1622. Article 7 of Regulation (EU) No 537/2014 applies to a statutory auditor or audit firm carrying out the assurance of sustainability reporting of a public-interest entity in the same manner as it applies to a statutory auditor or audit firm carrying out the statutory audit of a public-interest entity, and for that purpose –

• (a) references to carrying out the statutory audit of a public-interest entity shall be construed as references to carrying out the assurance of sustainability reporting of a public-interest entity, and

• (b) references to the audited entity shall be construed as references to the entity the subject of the assurance of sustainability reporting.

Removal or resignation of statutory auditors from carrying out assurance of sustainability reporting

1623. Chapter 20 of Part 6 shall apply to the removal or resignation of statutory auditors appointed to carry out the assurance of sustainability reporting of an applicable company in the same manner as it applies to the removal or resignation of statutory auditors appointed to carry out a statutory audit, subject to the following modifications:

• (a) references to the removal or resignation of a statutory auditor shall be construed as references to the removal or resignation, as the case may be, of a statutory auditor in respect of the carrying out of the assurance of sustainability reporting of the company;

• (b) references to accounting treatments or audit procedures shall be construed as references to sustainability reporting or assurance procedures;

• (c) any other necessary modifications.

Removal of statutory auditors from carrying out assurance of sustainability reporting of public-interest entities

1624. (1) In the case of the assurance of sustainability reporting of a public-interest entity –

• (a) shareholders representing 5 per cent or more of the voting rights or of the share capital, or

• (b) the Supervisory Authority,

may bring a claim before the High Court for the removal of the statutory auditor or audit firm carrying out the assurance of sustainability reporting of the entity subject to there being good and substantial grounds for bringing such a claim before the Court.

• (2) The grounds for bringing the claim before the High Court shall relate to –

• (a) the conduct of the auditor or audit firm with regard to the performance of his or her duties in relation to the carrying out of the assurance of sustainability reporting of the public-interest entity or otherwise, or

• (b) the petitioner’s opinion that it is in the best interests of the public-interest entity to do so.

• (3) For the purposes of subsection (2) –

• (a) diverging opinions on sustainability reporting or assurance procedures cannot constitute the basis for the passing of any resolution for the purposes of that subsection, and

• (b) ‘best interests of the public-interest entity’ shall not include any illegal or improper motive with regard to avoiding disclosures or detection of any contravention by the entity of this Act.

Notification to Supervisory Authority of certain matters regarding cessation of office

1625. Sections 403 and 404 shall apply to a statutory auditor appointed for the purposes of carrying out the assurance of sustainability reporting of an applicable company in the same manner as it applies to statutory auditors appointed for the purposes of carrying out a statutory audit subject to the following:

• (a) a reference to section 394 or 400, or a provision of either of those sections, shall be construed as a reference to that section or that provision as applied by section 1623;

• (b) any other necessary modifications.

Chapter 5 Approval to carry out assurance of sustainability reporting

Approval to carry out assurance of sustainability reporting

1626. (1) A recognised accountancy body may, on application made to it by an individual or a firm, approve, under this Part, the applicant to carry out the assurance of sustainability reporting.

• (2) A recognised accountancy body may, on application made to it by a third-country auditor and in accordance with section 1640, approve, under this Part, the applicant to carry out the assurance of sustainability reporting.

• (3) The recognised accountancy body shall maintain a record in writing of all persons approved by it to carry out the assurance of sustainability reporting, including the individual identification number assigned to any such persons in accordance with section 1464.

Conditions for approval to carry out assurance of sustainability reporting as statutory auditor

1627. Subject to section 1635, a person shall not be eligible for approval to carry out the assurance of sustainability reporting unless he or she is approved and registered under Part 27 as a statutory auditor and either –

• (a) holds an appropriate qualification as referred to in section 1628,

• (b) in the case of a Member State auditor, complies with section 1629, or

• (c) in the case of a third-country auditor, complies with sections 1629 and 1640.

Appropriate qualification for purpose of section 1627(a)

1628. (1) A person holds an appropriate qualification, as required by section 1627(a), if he or she holds a qualification granted by a recognised accountancy body whose standards relating to training and qualifications for the approval to carry out the assurance of sustainability reporting are not less than those specified in Schedule 23.

• (2) In subsection (1), ‘qualification’ means a qualification to undertake the assurance of sustainability reporting of a company in so far as required by European Union law.

• (3) A recognised accountancy body may exempt in writing a person who has passed a university or equivalent examination, or who holds a university degree or equivalent qualification, in one or more of the subjects referred to in the test of theoretical knowledge specified in Schedule 23 if the body is satisfied that the passing of that examination, or the holding of that university degree or equivalent qualification, renders it unnecessary for the person to undergo that test in so far as those subjects are concerned.

• (4) The Supervisory Authority shall, at such times as it thinks it appropriate to do so, issue guidelines to recognised accountancy bodies as to the specific matters that should be given regard to in reaching a decision under subsection (3) whether or not to grant an exemption under that subsection to a person.

Aptitude test to be passed

1629. (1) Subject to subsection (2), a Member State auditor or third-country auditor applying for approval to carry out the assurance of sustainability reporting in the State is required to sit and pass an aptitude test to demonstrate his or her knowledge of the enactments and practice that are relevant to the assurance of sustainability reporting in the State.

• (2) Subsection (1) shall not apply to a Member State auditor or third-country auditor if the recognised accountancy body is satisfied that he or she has otherwise demonstrated sufficient knowledge of the enactments and practice referred to in that subsection.

• (3) The Supervisory Authority shall, at such time as it thinks it appropriate to do so, issue guidelines to each recognised accountancy body as to the specific matters that should be given regard to in reaching a decision under subsection (2) whether or not a person has demonstrated the knowledge referred to in subsection (1).

• (4) A recognised accountancy body may charge and impose on a Member State auditor or third-country auditor a fee, of an amount specified from time to time by the Minister, that is sufficient to meet the body’s administrative expenses in respect of the administration of an aptitude test under this section in relation to him or her.

• (5) A fee imposed under subsection (4) may, in default of payment, be recovered from the Member State auditor or third-country auditor concerned as a simple contract debt in any court of competent jurisdiction.

Scope of aptitude test

1630. (1) The aptitude test referred to in section 1629 shall –

• (a) be conducted in either the Irish language or the English language, and

• (b) relate only to the applicant’s adequate knowledge of the enactments and practice that are relevant to the assurance of sustainability reporting in the State.

• (2) Subject to subsection (3), the various matters that shall constitute the contents of the aptitude test shall be decided by the recognised accountancy body after it has received the approval of the Supervisory Authority of the contents of the test.

• (3) A recognised accountancy body shall not alter the contents of an aptitude test approved under subsection (2) unless such alteration has been approved by the Supervisory Authority.

Adequate standards to be applied in administration of aptitude test

1631. (1) Subject to subsection (2), a recognised accountancy body shall apply adequate standards in the administration of the aptitude test referred to in section 1629.

• (2) No standards shall be used by a recognised accountancy body for the purposes of subsection (1) unless those standards have (with respect to that use) first been approved by the Supervisory Authority.

Conditions for approval to carry out assurance of sustainability reporting as a statutory audit firm

1632. (1) In this section, references to a firm include references to a Member State audit firm if the firm is not seeking registration in accordance with section 1633.

• (2) A firm shall not be eligible for approval to carry out the assurance of sustainability reporting unless –

• (a) the firm is approved and registered under Part 27 as a statutory audit firm, and

• (b) the individuals who carry out the assurance of sustainability reporting in the State on behalf of the firm are approved to do so in accordance with this Part.

Basis on which audit firms approved in other Member States may carry out assurance of sustainability reporting in State

1633. (1) A Member State audit firm shall be entitled to carry out the assurance of sustainability reporting in the State if the key sustainability partner who carries out the assurance on behalf of the audit firm, both at the time of registration (in accordance with subsection (2)) and at all times during the registration of the firm, complies with the requirements of this Chapter.

• (2)
• (a) An audit firm that wishes to carry out the assurance of sustainability reporting in the State where the State is not its home Member State shall, before carrying out any such assurance, register with the recognised accountancy body by which the key sustainability partner referred to in subsection (1) is approved.

• (b) The recognised accountancy body shall ensure that an audit firm which complies with subsection (1) is registered in accordance with the requirements of Chapter 5 of Part 27, section 1636 and Schedules 20 and 24.

• (3)
• (a) The recognised accountancy body shall register the Member State audit firm if it is satisfied that the audit firm is registered with the counterpart authority in the audit firm’s home Member State to carry out the assurance of sustainability reporting.

• (b) Where the recognised accountancy body intends to rely on a certificate, issued by the counterpart authority in the home Member State, attesting to the registration of the audit firm in the home Member State, the recognised accountancy body may require that such certificate be issued on a date falling within the 3 months immediately preceding that date on which the recognised accountancy body is given that certificate.

• (4) The recognised accountancy body shall maintain a record of all Member State audit firms registered with it under subsection (2)(a), including the individual identification number assigned to such firms in accordance with section 1465.

• (5) The recognised accountancy body shall inform the counterpart authority in the home Member State of the registration of the audit firm.

• (6) Where a recognised accountancy body receives a notification from another Member State that an audit firm, whose home Member State is the State, has registered with the counterpart authority in the host Member State to carry out the assurance of sustainability reporting, the recognised accountancy body shall ensure that such registration is recorded in the public register.

Restriction as to persons who may carry out assurance of sustainability reporting

1634. (1) The assurance of sustainability reporting shall be carried out only by –

• (a) statutory auditors or statutory audit firms that are approved under this Part to carry out the assurance of sustainability reporting, or

• (b) audit firms registered in accordance with section 1633.

• (2) A person shall not –

• (a) act as if he or she is approved to carry out the assurance of sustainability reporting,

• (b) describe himself or herself as a person who may carry out the assurance of sustainability reporting, or

• (c) so hold himself or herself out as to indicate, or be reasonably understood to indicate, that he or she may carry out the assurance of sustainability reporting,

unless he or she has been approved in accordance with this Part.

• (3) A firm shall not –

• (a) act as if it is approved to carry out the assurance of sustainability reporting,

• (b) describe itself as a firm who may carry out the assurance of sustainability reporting, or

• (c) so hold itself out as to indicate, or be reasonably understood to indicate, that it may carry out the assurance of sustainability reporting,

unless it has been approved in accordance with this Part or registered in accordance with section 1633.

Transitional provisions relating to approval of certain statutory auditors

1635. (1) Subject to subsection (3), a statutory auditor who, immediately before 1 January 2024, stood approved under Part 27 to carry out statutory audits shall not be subject to the requirements of paragraph (a), (b) or (c) of section 1627 and Schedule 23.

• (2) Subject to subsection (3), where a person was, on 1 January 2024, undergoing the approval process provided for in Part 27, that person shall not be subject to the requirements of paragraph (a), (b) or (c) of section 1627 and Schedule 23, provided the person completes that process by 1 January 2026.

• (3) A statutory auditor who, immediately before 1 January 2026, stands approved under this Part shall acquire the necessary knowledge of sustainability reporting and the assurance of sustainability reporting, including the subjects listed in Schedule 23, by taking part in the continuing education required by section 1638.

Public register

1636. The public register referred to in section 1484(1) shall, in addition to the information referred to in that section, contain the information set out in Schedule 24 in relation to the categories of persons referred to in paragraphs (a), (b) and (c) of that subsection.

Notification of information to Registrar

1637. (1) (a) An auditor or audit firm shall, as soon as may be after he or she is approved under this Chapter to carry out the assurance of sustainability reporting, notify the relevant information to the recognised accountancy body.

• (b) A Member State audit firm shall, as soon as may be after it is registered in accordance with section 1633, notify the relevant information to the recognised accountancy body.

• (c) A third-country auditor shall, as soon as may be after he or she is approved under this Part to carry out the assurance of sustainability reporting, notify the relevant information to the recognised accountancy body.

• (2) On receipt of a notification under subsection (1), and having carried out any verification of the information as seems to it to be necessary, the recognised accountancy body, as appropriate, shall notify to the Registrar –

• (a) the relevant information contained in the notification, and

• (b) the individual identification number assigned by it to the auditor, audit firm or third-country auditor under section 1464(6) or a Member State audit firm under section 1465(4).

• (3) The notifications under subsections (1) and (2) shall each be made in such form and manner as the Registrar specifies.

• (4) In this section, ‘relevant information’ means the information set out in paragraph 1, 2 or 3, as the case may be, of Schedule 24.

• (5) For the avoidance of doubt, in the event that a recognised accountancy body is no longer recognised by the Supervisory Authority for the purposes of the relevant provisions or otherwise ceases to exist, the notifications under subsections (1) and (2) shall cease to have effect and the Registrar shall remove all information contained in such notifications from the public register.

Continuing education

1638. (1) It shall be a condition of an approval granted under this Chapter that the statutory auditor shall take part in appropriate programmes of continuing education in order to maintain his or her theoretical knowledge, professional skills and values, including, in particular, in relation to the assurance of sustainability reporting, at a sufficiently high level.

• (2) The Supervisory Authority shall, at such times as it thinks it appropriate to do so, issue guidelines to the recognised accountancy bodies with regard to what constitutes compliance with the condition referred to in subsection (1).

Withdrawal of approval under this Part

1639. (1) Without prejudice to Chapter 4 of Part 27, a recognised accountancy body shall, subject to subsection (2), withdraw an approval of a person to carry out the assurance of sustainability reporting under this Part if, but only if, the person –

• (a) no longer stands approved under Part 27 as a statutory auditor or statutory audit firm, or

• (b) no longer complies with paragraph (a), (b) or (c) of section 1627.

• (2) For the purposes of subsection (1), sections 1479(3) to (16), 1480(3) to (16), 1481, 1482 and 1483 shall apply to the withdrawal of approval under this Part in the same manner as they apply to the withdrawal of approval under Part 27 subject to the following modifications:

• (a) a reference (howsoever expressed) to the approval under Part 27 of the person as a statutory auditor or statutory audit firm shall be construed as a reference to the approval under this Part of a person to carry out the assurance of sustainability reporting;

• (b) a reference in sections 1479 and 1480 to subsection (2)(a), (b) or (c) shall be construed as reference to subsection (1)(a) or (b) of this section;

• (c) any other necessary modifications.

Chapter 6 Approval and registration of third-country auditors for purposes of carrying out assurance of sustainability reporting

Approval of third-country auditors to carry out assurance of sustainability reporting

1640. (1) Without prejudice to the requirements of Chapter 5 and subject to subsection (2), a recognised accountancy body may approve a third-country auditor to carry out the assurance of sustainability reporting if that person has furnished proof that he or she complies with requirements equivalent to those specified in section 1628.

• (2) A third-country auditor shall not be approved under subsection (1) unless reciprocal arrangements with the third country concerned are in place, that is to say arrangements that enable a statutory auditor to carry out the assurance of sustainability reporting in that third country –

• (a) by virtue of the law of that third country, and

• (b) on fulfilment by the statutory auditor concerned of requirements no more onerous than those specified by this section and Chapter 5 for the third-country auditor’s approval under subsection (1).

Registration of third-country audit firms and third-country audit entities for assurance of sustainability reporting

1641. (1) (a) Subject to paragraph (b) and Chapter 21 of Part 27 as applied by subsection (2), the Supervisory Authority shall, in accordance with the relevant provisions of Chapter 5 of Part 27, section 1636 and Schedules 20 and 24, cause to be registered in each year in the public register every third-country auditor and third-country audit entity that indicates, in writing to it, his or her intention to provide an assurance report concerning the sustainability reporting of an applicable company that falls within section 1573(3).

• (b) Paragraph (a) shall not apply to a third-country auditor or third-country audit entity that provides assurance reports of undertakings incorporated in third countries in respect of which –

• (i) the Commission has not yet made a decision that the public oversight, quality assurance and investigation and penalty systems for third-country auditors and third-country audit entities meet requirements which shall be considered equivalent to those of Articles 29, 30 and 32 of the Audit Directive, or

• (ii) such a decision was made but for a specified period of time which has now expired.

• (2) Chapter 21 of Part 27 shall apply in relation to the registration of a third-country auditor and third-country audit entity pursuant to subsection (1) in the same manner as it applies in respect of the registration of a third-country auditor and third-country audit entity pursuant to section 1573 subject to the following modifications:

• (a) subsection (1) of this section shall be substituted for subsection (1) of section 1573;

• (b) references in section 1573 to subsection (1) of that section shall be construed as references to subsection (1) of this section;

• (c) references (howsoever expressed) to registration pursuant to section 1573 shall be construed as references to registration pursuant to subsection (1);

• (d) a reference to registration under Chapter 5 shall include reference to registration in accordance with section 1636;

• (e) references to Schedule 20 shall be construed as including a reference to Schedule 24;

• (f) a reference in section 1576 to an audit report provided by a third-country auditor or third-country audit entity concerning the accounts or consolidated accounts of an undertaking falling within section 1573(3) shall be construed as a reference to an assurance report provided by a third-country auditor or third-country audit entity concerning the sustainability reporting of an applicable company that falls within section 1573(3);

• (g) a reference in section 1577(2) to sections 1464 and 1472 shall include a reference to sections 1626 and 1628;

• (h) a reference to the audit of accounts or consolidated accounts shall be construed as reference to the assurance of sustainability reporting;

• (i) a reference to international auditing standards as referred to in section 1526 shall be construed as reference to assurance standards as referred to in section 1610;

• (j) any other necessary modifications.

Chapter 7 Quality assurance and oversight of statutory auditors carrying out assurance of sustainability reporting

System of quality assurance

1642. (1) Without prejudice to Chapter 7 of Part 27, the Supervisory Authority shall ensure that the quality assurance systems it has in place pursuant to that Chapter include a system of quality assurance in relation to the carrying out of the assurance of sustainability reporting in accordance with this Part.

• (2) Without prejudice to Chapter 7 of Part 27, a recognised accountancy body shall ensure that the system of quality assurance it has in place pursuant to that Chapter includes a system of quality assurance of –

• (a) the body’s members’ activities as statutory auditors and audit firms that carry out the assurance of sustainability reporting of entities not referred to in section 1494(1) and (2), and

• (b) the activities, as statutory auditors and audit firms that carry out the assurance of sustainability reporting, of persons who, though not members of the recognised accountancy body, are persons in relation to whom the body may perform functions under the relevant provisions.

• (3) For the purposes of subsection (1), a reference in Chapter 7 of Part 27 to registered third-country auditors and third-country audit entities shall include a reference to a third-country auditor or third-country audit entity registered under section 1641.

Organisation of quality assurance system

1643. (1) Section 1496 shall apply in relation to the quality assurance system referred to in section 1642(2) in the same manner as it applies in relation to the quality assurance system referred to in section 1495(2) subject to the following modifications:

• (a) the reference in subsection (1)(d) and subsection (2)(a) to appropriate professional education and relevant experience in statutory audit and financial reporting shall be construed as a reference to appropriate professional education and relevant experience in sustainability reporting and the assurance of sustainability reporting or other sustainability-related services;

• (b) the following shall be substituted for paragraph (f) of subsection (1):

• “(f) the scope of quality assurance reviews of assurance of sustainability reporting, supported by adequate testing of selected assurance files, includes, except where otherwise agreed with the Supervisory Authority, an assessment of –

  • (i) compliance with applicable assurance of sustainability standards and independence requirements,

  • (ii) the quantity and quality of resources spent,

  • (iii) the fees charged in respect of the assurance of sustainability reporting, and

  • (iv) the internal quality control system of the audit firm,”;

• (c) the reference in subsection (1)(h) to section 1497 shall be construed as a reference to section 1644;

• (d) the following shall be substituted for subsection (3):

• “(3) For the purpose of subsection (1)(k), a recognised accountancy body, when undertaking quality assurance reviews of the assurance of sustainability reporting of the consolidated sustainability reporting of medium or small companies, shall take account of the fact that assurance standards adopted in accordance with Article 26a of the Audit Directive are designed to be applied in a manner that is proportionate to the scale and complexity of the business of the undertaking.”;

• (e) any other necessary modifications.

• (2) Until 31 December 2025, persons who carry out quality assurance reviews relating to the assurance of sustainability reporting shall be exempted from the requirement in section 1496(2)(a) as applied by subsection (1) to have relevant experience in sustainability reporting and the assurance of sustainability reporting or other sustainability-related services.

Quality assurance review deemed to include individual auditors in certain cases

1644. For the purpose of section 1496(1)(h) as applied by section 1643, a quality assurance review conducted in relation to a statutory audit firm shall be regarded as a quality assurance review of all statutory auditors carrying out the assurance of sustainability reporting on behalf of the firm provided that the firm has a common quality assurance policy with which each such statutory auditor is required to comply.

Right of recognised accountancy body as regards professional discipline

1645. A recognised accountancy body shall have the right to take disciplinary actions or impose sanctions in respect of statutory auditors and audit firms who carry out the assurance of sustainability reporting and shall have procedures in place to facilitate the taking or imposition of such action or sanctions.

System of investigation and penalties

1646. (1) Without prejudice to section 1499 and subject to subsection (2), each recognised accountancy body shall, in respect of those auditors and audit firms in relation to whom, by virtue of section 930C, it may perform functions, institute arrangements to ensure that there are effective systems of investigations and penalties to detect, correct and prevent the inadequate execution of the assurance of sustainability reporting by those statutory auditors and audit firms.

• (2) Subsection (1) shall not be construed to empower a recognised accountancy body referred to in that subsection to impose a penalty on a statutory auditor or audit firm of a public-interest entity in the case of a relevant contravention committed by that auditor or audit firm that relates (whether in whole or in part) to that entity.

• (3) For the purposes of this section, sections 1500, 1501 and 1502, and Chapter 9 of Part 27, shall apply subject to the following modifications:

• (a) a reference to the carrying out of a statutory audit (howsoever expressed) shall be construed as reference to the carrying out of the assurance of sustainability reporting;

• (b) the penalties referred to in section 1501, provision for which shall be made by the means referred to in that section, shall, where appropriate, include withdrawal of approval under this Part or, if applicable, withdrawal of a registration under section 1633 and a temporary prohibition referred to in point (ca) of Article 30a(1) of the Audit Directive and a declaration referred to in point (da) of that Article;

• (c) the following shall be substituted for paragraphs (d) and (e) of section 1506(1):

• “(d) a declaration by the Supervisory Authority that the assurance report concerned does not meet the requirements of Chapter 4 of Part 28;

• (e) a direction by the Supervisory Authority to the specified person (being any one or more of a statutory auditor or key sustainability partner) prohibiting him or her, for the period specified in the direction (which may be up to and including an indefinite period), from carrying out the assurance of sustainability reporting or signing assurance reports, or both;”;

• (d) any other necessary modifications.

Co-operation and mutual recognition of regulatory arrangements between Member States

1647. The requirements of Chapters 17 and 18 of Part 27 shall apply in relation to the carrying out of the assurance of sustainability reporting in the same manner as they apply to the carrying out of statutory audits subject to the following modifications:

• (a) references (howsoever expressed) to the carrying out of statutory audits shall be construed as a reference to the carrying out of the assurance of sustainability reporting;

• (b) references (howsoever expressed) to the audited undertaking shall be construed as a reference to the applicable company the subject of the assurance of sustainability reporting;

• (c) any other necessary modifications.

Transfer of assurance working papers etc. to third-country competent authorities

1648. Chapter 19 of Part 27 shall apply to the transfer of working papers or other documents and inspection or investigation reports relating to the assurance of sustainability reporting in the same manner as it applies to audit working papers or other documents and inspection or investigation reports relating to audits subject to the following modifications:

• (a) references to audit working papers shall be construed as references to assurance working papers;

• (b) references to inspection or investigation reports relating to the audits shall be construed as references to inspection or investigation reports relating to the assurance of sustainability reporting;

• (c) references to an audit shall be construed as references to the assurance of sustainability reporting;

• (d) any other necessary modifications.”.

Insertion of Schedules 23 and 24 in Principal Act

25.

“SCHEDULE 23

Standards relating to training and qualifications for approval to carry out assurance of sustainability reporting

Section 1628

1. An individual shall have attained university entrance or equivalent level and then –

2. (a) completed a course of theoretical instruction,

3. (b) undergone practical training, and

4. (c) passed an examination of professional competence which is of at least the standard required in the State for university final or equivalent examination level.

5. (1) The examination of professional competence referred to in paragraph 1 shall be such as guarantees the necessary level of theoretical knowledge of subjects relevant to the assurance of sustainability reporting and the ability to apply such knowledge in practice. Part at least of that examination shall be in writing.

6. (2) The test of theoretical knowledge included in the examination shall include the following subjects in particular:

   • (a) legal requirements and standards relating to the preparation of annual and consolidated sustainability reporting;

   • (b) sustainability analysis;

   • (c) due diligence processes with regard to sustainability matters;

   • (d) legal requirements and assurance standards for the sustainability reporting referred to in section 1610.

   • (1) In order to ensure the ability to apply theoretical knowledge in practice, a test of which is included in the examination, the statutory auditor or trainee shall complete a minimum of eight months’ practical training on the assurance of annual and consolidated sustainability reporting or on other sustainability-related services.

7. (2) All such training shall be carried out with persons who a recognised accountancy body is satisfied possess, to an adequate standard, the ability to provide practical training.

SCHEDULE 24 Additional information required to be supplied and entered in Public Register

Section 1636

Statutory auditors

• (a) whether the statutory auditor is approved under Part 28 to carry out the assurance of sustainability reporting;

• (b) if he or she is registered with one or more recognised accountancy bodies, counterpart authorities or third-country competent authorities, whether the registration concerns the assurance of sustainability reporting.

Statutory audit firms and audit firms approved in another Member State

• (a) the name of every individual employed by or associated as partner or otherwise with the audit firm who is approved under Part 28 to carry out the assurance of sustainability reporting;

• (b) if the audit firm is registered with one or more recognised accountancy bodies, counterpart authorities or third-country competent authorities, whether the registration concerns the assurance of sustainability reporting;

• (c) where the audit firm is approved in another Member State to carry out the assurance of sustainability reporting and is registered in the public register of that Member State –

• (i) the fact that the firm is so registered, and

• (ii) the name of the Member State and the counterpart authority in that Member State.

Third-country auditors and third-country audit entities

• (a) whether the third-country auditor or audit entity is registered under section 1641,

• (b) the information specified in the provisions of paragraph 1 or, as the case may be, 2 (as, in either case, those provisions are applied by subparagraph (2)).

• (2) The provisions of paragraph 1 or 2, as the case may be, apply for the purposes of this paragraph save so much of them as are inapplicable in the case of a third-country auditor or third-country audit entity, as appropriate.

• (3) Third-country auditors or third-country audit entities so registered shall be clearly indicated in the register as such and not as statutory auditors or audit firms.”.

PART 3 AMENDMENT OF TRANSPARENCY (DIRECTIVE 2004/109/EC) REGULATIONS 2007

Definition – Part 3

Amendment of Regulation 2 of Regulations of 2007

“ ‘Regulation (EU) 2020/852’ means Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020¹⁶ on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088;

‘sustainability reporting’ means sustainability reporting as defined in point (18) of Article 2 of the Accounting Directive;”.

Application of Regulation 5(2)(d) and (e), (3)(a) and (b) and (4)(c)

“3A. (1) Without prejudice to Part 28 of the Act of 2014, and subject to paragraph (2), the requirements in paragraphs (2)(d) and (e), (3)(a) and (b) and (4)(c) of Regulation 5 shall apply –

• (a) for financial years commencing on or after 1 January 2024 –

  • (i) to issuers which are large undertakings within the meaning of Article 3(4) of the Accounting Directive exceeding on their balance sheet dates the average number of 500 employees during the financial year, and

  • (ii) to issuers which are parent undertakings of a large group within the meaning of Article 3(7) of the Accounting Directive exceeding on its balance sheet dates, on a consolidated basis, the average number of 500 employees during the financial year,

• (b) for financial years commencing on or after 1 January 2025 –

  • (i) to issuers which are large undertakings within the meaning of Article 3(4) of the Accounting Directive other than those referred to in point (a)(i) of this Regulation, and

  • (ii) to issuers which are parent undertakings of a large group within the meaning of Article 3(7) of the Accounting Directive other than those referred to in point (a) (ii) of this subparagraph,

• (c) for financial years commencing on or after 1 January 2026:

  • (i) to issuers which are small and medium-sized undertakings within the meaning of Article 3(2) and (3) of the Accounting Directive and which are not micro-undertakings as defined in Article 3(1) of that Directive,

  • (ii) to issuers defined as small and non-complex institutions in point (145) of Article 4(1) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013¹⁷ , provided they are large undertakings within the meaning of Article 3(4) of the Accounting Directive or that they are small and medium-sized undertakings within the meaning of Article 3(2) and (3) of that Directive which are public-interest entities as defined in point (a) of point (1) of Article 2 of that Directive and which are not micro-undertakings as defined in Article 3(1) of that Directive,

  • (iii) to issuers defined as captive insurance undertakings in point (2) of Article 13 of Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009¹⁸ , or as captive reinsurance undertakings in point (5) of Article 13 of that Directive, provided that they are large undertakings within the meaning of Article 3(4) of the Accounting Directive or that they are small and medium-sized undertakings within the meaning of Article 3(2) and (3) of that Directive which are public-interest entities as defined in point (a) of point (1) of Article 2 of that Directive and which are not micro-undertakings as defined in Article 3(1) of that Directive.

• (2) This Regulation applies to the requirements in paragraph (3)(a) and (b) of Regulation 5 only insofar as that paragraph relates to the requirements of Articles 19a, 29a and 29d of the Accounting Directive and Article 8(4) of Regulation (EU) 2020/852.”.

Amendment of Regulation 5 of Regulations of 2007

• (a) in paragraph (2), by the insertion of the following subparagraphs after subparagraph (c):

• “(d) Where applicable, an assurance opinion on sustainability reporting shall be provided in accordance with point (aa) of the second subparagraph of Article 34(1) and Article 34(2) to (5) of the Accounting Directive.

• (e) The assurance report on sustainability reporting referred to in Article 28a of Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006¹⁹ shall be disclosed in full to the public together with the annual financial report.”,

• (b) in paragraph (3) –

• (i) by the substitution, in paragraph (a), of “Articles 29, 29a and 29d(2) of the Accounting Directive and shall include the specifications adopted pursuant to Article 8(4) of Regulation (EU) 2020/852, when drawn up by undertakings referred to in those provisions” for “Article 29 of the Accounting Directive”, and

• (ii) by the substitution, in paragraph (b), of “Article 19, 19a, 20 and 29d(1) of the Accounting Directive and shall include the specifications adopted pursuant to Article 8(4) of Regulation (EU) 2020/852, when drawn up by undertakings referred to in those provisions” for “Article 19, and where relevant, Article 20 of the Accounting Directive”,

• (c) in paragraph (4), by the substitution of the following paragraph for subparagraph (c):

• “(c) For each person making a responsibility statement, the statement shall set out that to the best of his or her knowledge –

• (i) the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer and the undertakings included in the consolidation taken as a whole,

• (ii) the management report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face, and

if applicable, that it is prepared in accordance with sustainability reporting standards referred to in Article 29b of the Accounting Directive and with the specifications adopted pursuant to Article 8(4) of Regulation (EU) 2020/852.”.

GIVEN under my Official Seal,

5 July, 2024.

PETER BURKE,

Minister for Enterprise, Trade and Employment.

EXPLANATORY NOTE

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

The European Union (Corporate Sustainability Reporting) Regulations 2024 transpose Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting, into national law.

The Regulations are in 3 Parts. Part 1 provides for the citation, construction and commencement. Part 2 makes consequential amendments to the Companies Act 2014 and inserts a new Part 28 on Sustainability Reporting, whilst Part 3 makes amendments to the Transparency Regulations 2007.

The Regulations require all large companies, and all listed companies (except listed micro-enterprises) to provide information on sustainability matters, defined as environmental, social and governance (‘ESG’) including human rights matters according to mandatory European Sustainability Reporting Standards in the directors’ report.

The Regulations amend relevant provisions of the Companies Act 2014 , providing rules on sustainability assurance standards and oversight including the approval and registration of statutory auditors and audit firms to carryout assurance of sustainability reporting, along with providing for provisions concerning the audit committees’ role.

The sustainability reporting is gradually applicable across the period 2024 to 2028 commencing for financial years on or after:

o 1 January 2024 for public interest entities (greater than 500 employees)

o 1 January 2025 for other larger companies (greater than 250 employees)

o 1 January 2026 for listed SMEs, with an ‘opt out’ possible until 2028

o 1 January 2028 for large subsidiaries and branches of non-EU companies with a net turnover of €150 million in the EU.

Footnotes