Credit union loans
The Central Bank of Ireland has published an analysis of the impact of the changes to credit union lending rules introduced in 2020. Following its review, the Central Bank is consulting on a proposal for a number of material changes to the regulations on concentration limits for house and business lending, and on lending practices for specific categories of lending.
Prize draws
In 2018 the Central Bank published the findings of a thematic review of credit union prize draws. This highlighted particular weaknesses in credit unions’ systems of control for member prize draws, and suggested that some credit unions had failed to fully and properly apply its guidance of February 2017.
As a result the Central Bank has published enhanced guidance on its expectations and recommendations in its credit union handbook, including the expectation that member prize draws will be reviewed by both internal and external audit. It recommends: ‘Transactions in the prize draw should be reviewed on an annual basis by the external auditor, and prize draw transactions and balances should be reported separately in the annual accounts.’
Both external and internal audit should review credit union prize draws
Credit unions are expected to have effective systems of control in place and to comply with the conditions on member prize draws set out in the amending regulations.
Given the potential impact of a failure by a credit union to adhere to proper controls, the Central Bank considers that both the external and internal audit function should give due consideration to the operation and related financial transactions of member prize draws.
The Central Bank expects the auditor to ‘assess, on a sample basis and in line with materiality as determined by the auditor, transactions related to the prize draw. We would expect that the scope of the work of the external auditor in this regard may be informed by the work undertaken and assurances (or otherwise) provided by the internal auditor during the financial year.’
The Central Bank will shortly be updating the services chapter of the credit union handbook to reflect its guidance on the application of the new regulations, which will also cover member prize draws.
FRS 101
The Financial Reporting Council (FRC) has issued an exposure draft on its proposed amendments to FRS 101, Reduced Disclosure Framework. FRS 101 is for subsidiary entities using IFRS Standards but with a reduced disclosure burden. The amendments will offer an exemption from some new requirements in IFRS 18, including those for management-defined performance measures.
IFRS 19 will allow certain subsidiaries to substantially reduce their disclosures
Qualifying entities will be prevented from applying both FRS 101 and IFRS 19. The exposure draft is open for comment until 7 March 2025.
IFRS 19
The International Accounting Standards Board has issued IFRS 19, Subsidiaries without Public Accountability: Disclosures. The standard will allow certain subsidiaries using IFRS Accounting Standards to substantially reduce their disclosures.
In Ireland a different reduced disclosure framework for users of IFRS Accounting Standards already exists: FRS 101, Reduced Disclosure Framework.
The single EU anti-money laundering regulator has begun recruiting
To comply with Irish company law, company financial statements must be prepared in accordance with either IFRS Accounting Standards adopted by the EU (including IFRS 19 once it has been approved) or FRC financial reporting standards (including FRS 101). The FRC has issued a summary of the differences between FRS 101 and IFRS 19 and its thoughts on the future of FRS 101.
Audit monitoring
The ACCA audit monitoring compliance team has published its latest quarterly article on issues arising from its work. This quarter’s article looks at audit sampling, walkthroughs and analytical procedures.
Investment screening
The Screening of Third Country Transactions Act 2023 gives effect to the EU’s FDI Screening Regulation 2019/452 and introduces an inward investment screening mechanism in Ireland. All provisions of the act came into force on 6 January 2025.
Charities
The Charities Regulator has published a summary of the new Charities Amendment Act 2024. It includes some significant changes, including human rights now being a permitted charitable purpose.
AML
The single EU anti-money laundering (AML) regulator has begun recruiting more than 400 staff. Job profiles include finance and legal professionals, data analysts and admin/HR. The regulator’s website details the application process and job vacancies. Some roles will be based in member states but most are likely to be in Frankfurt.
Financial reporting
The Irish Auditing and Accounting Supervisory Authority has published its report on the financial statement examinations it completed in 2024 and the outcomes of those examinations.
Maternity leave
The Maternity Protection Act 2024 allows for the postponement of maternity leave for a period of between five weeks and one year, provided the person concerned is being treated for a serious health condition. This includes a serious mental health condition, which is interpreted in the act as being in-patient hospital treatment.
