The body which supervises auditing and accounting in Ireland has fined a Co Kildare based audit partner €10,500 as part of a settlement agreement, following the identification of a number of contraventions and non-compliance with rules.
John Kavanagh of Howlett Kavanagh Chartered Accountants in Naas has also been prohibited from signing statutory audit reports by the Irish Auditing and Accounting Supervisory Authority (IAASA) for a period of 12 months.
The firm itself has also been prohibited from conducting statutory audits for a period of a year as part of the same settlement.
The contraventions were admitted by both Mr Kavanagh and the business, which is no longer trading.
The case relates to an audit of financial statements of a special purpose vehicle (SPV), Glenfinnian Bond DAC, for the year ending December 2019.
IAASA identified a number of contraventions and non-compliance with legislation and regulation in the audit.
The audit business's non-compliance with the relevant requirements for a firm’s systems of internal quality control, also formed the basis of the grounds probed in relation to it.
Among the findings regarding Mr Kavanagh were that he failed to inform IAASA of his appointment as a statutory auditor to a public-interest entity and no engagement quality control review was performed on the audit of the SPV for the year ended December 2019.
The review also found Mr Kavanagh engaged in providing prohibited non-audit services to the entity and that the audit was deficient in a wide range of areas.
While regarding Howlett Kavanagh Chartered Accountants, IAASA found it provided prohibited non-audit services to Glenfinnian Bond DAC and in doing so failed to identify and assess the significance of any related threats to the integrity or objectivity of the audit firm and covered persons.
The firm also did not have sufficient policies and procedures in place to ensure that the auditor had the appropriate competence and capabilities to perform the role IAASA found.
It also failed to ensure that engagement quality control reviews were carried out for audits that met required criteria.
The business also failed to comply with its monitoring policies and procedures.
"The Authority considers that the respondents acted in a manner that was a serious departure from the standards expected of a statutory auditor and audit firm," the enforcement action states.
"There were numerous breaches of EU law and domestic legislation. In addition, there were numerous and significant departures from the International Standards on Auditing (Ireland) identified."
"These are considered by the Authority to be aggravating factors."
But in mitigation it found Mr Kavanagh and the firm engaged from the outset of the preliminary investigation by IAASA.
"The respondents' timely admissions demonstrate his insight into the contraventions that were identified," the report said.
"The Authority has also taken into account that the respondents have no previous disciplinary history."
It also took account of the fact that the firm is no longer trading.
Overall, IAASA applied a 30% early settlement discount to the fine.
