The accountancy and auditing supervisory body has reprimanded and fined two auditors over their role in auding the 2018 financial statements of an insurance firm.
Brian Hughes has been fined €10,500 and reprimanded by the Irish Auditing and Supervisory Authority (IAASA) for his involvement in the audit of Greenlight Reinsurance Ireland DAC.
John O'Callaghan has also been reprimanded and fined €10,500.
Mr Hughes acted as the Engagement Partner for the audit, IAASA said, while Mr O'Callaghan’s role was as Engagement Quality Control Review (EQCR).
Both men, who were working for BDO at the time, admitted the contraventions.
The sanctions were against the two men as individuals and IAASA did not take action against BDO.
"This investigation uncovered serious deficiencies in how the audit was undertaken," said IAASA CEO Kevin Prendergast.
"Amongst the issues that have formed the subject of this settlement, auditors need to satisfy themselves as to the adequacy of work undertaken by other audit firms, in particular where that work is undertaken in accordance with a different set of auditing standards."
"The engagement quality control review partner is tasked with ensuring that the audit is properly carried out and so also bears responsibility for audit failures."
IAASA said its investigation concerning Mr Hughes, identified a number of areas of non-compliance with international standards on auditing.
These included the overall objectives of the independent auditor, identifying as well as assessing risks of material misstatement.
Non-compliance also arose around communication with those charged with governance, forming an opinion and reporting on financial statements and communicating key audit matters in the independent auditor’s report.
The probe into Mr O’Callaghan identified non-compliance with international standards on auditing relating to quality control for an audit of financial statements.
In a statement BDO said it was important to note that IAASA did not question the appropriateness of the audit opinion issued.
"The firm immediately took the necessary steps to review and adapt our systems and procedures to reflect the findings and recommendations highlighted," it said.
"We are committed to continuously evolving our audit offering by investing in our people, processes, and technology."
"We recognise that quality improvement is an ongoing process and we continue to engage with our regulator in an open and transparent manner."
