The intention of this blog is to comment on some of the differences between the Industrial & Provident Societies Acts 1893 to 2021 versus the Companies Act, 2014:
Entity size thresholds – the Industrial & Provident Societies Acts 1893 to 2021 contain no concept for ‘micro’, ‘small’, ‘medium’ or ‘large’ entities, as these are all concepts enshrined in Irish company law by the Companies Act, 2014.
As a result Industrial & Provident societies (mostly these are cooperative ventures between community based groups) cannot:
- Be audit exempt;
- Avail of exemption from consolidation on the grounds of being a ‘small’ group;
- Cannot file abridged accounts; and
- Cannot use Section 1A of FRS 102 there is no concept of ‘small’ in their specific legislation;
- Must always include a Statement of Cash Flows under FRS 102/IFRS.
Statement on Relevant Audit Information – this is a statement required under section 330 of the Companies Act, 2014 where the directors of the company confirm that they have taken all relevant steps to inform the auditors of any relevant audit information and have established that the company’s statutory auditors are aware of that information. There is no equivalent requirement in the Industrial & Provident Societies Acts 1893 to 2021.
Compliance Statement – the Directors’ Compliance Statement (section 225 Companies Act, 2014) is required by certain entities incorporated under the Companies Act, 2014 but here is no equivalent in the Industrial & Provident Societies Acts 1893 to 2021.
There was a Government consultation to modernise the laws about Co-operative Societies which ended in February 2022 followed by a bill published in November 2022 but the bill hasn’t progressed as yet. See the Chartered Accountants Ireland website for the latest information available.
IT Controls Assessment
Auditors are reminded that there are relatively significant changes in the requirements of ISA 315 Identifying and Assessing the Risks of Material Misstatement for accounting periods commencing 15 December 2021, which in practical terms means, accounting periods Ended 31 December 2022 and later.
Auditors dealing with the audits of entities with such accounting periods affected by these change will need, to adopt new audit programmes and, in additional to the normal audit tests, to also assess the entity’s IT controls (no matter what the size of that entity).
This is a significant new development for auditors of SMEs, in particular, and will be a game changer ion the type of audit documentation and evidence of assessment of such IT controls by the auditor on audit files.
For an easy to implement additional (two page) IT Controls Questionnaire to help document the above process, please click on this link to download immediately for only €60 + VAT.
Please also go to our website to see our:
- Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
- AML webinar (March 2022) available here, which accompanies the AML Manual. It explains the current legal AML reporting position for accountancy firms and includes a quiz. Upon completion, you receive a CPD Certificate of attendance in your inbox.
- letters of engagement and similar templates. Please visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.
- ISQM TOOLKIT or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please contact John McCarthy FCA by e-mail at email@example.com.