The High Court has dismissed Peter Nowak’s application for judicial review of the Irish Auditing and Accounting Supervisory Authority’s decision not to make further inquiries into his complaint about PwC audits.
Mr Justice Noonan gave judgment on 17 February 2015. He held that the Authority’s decision not to initiate an inquiry under section 23 of the Companies (Auditing and Accounting) Act 2003 was within its discretion. He also found that the Authority had given a reason for its decision and that Mr Nowak had not established the standing required to bring the proceedings.
Mr Nowak had worked as a trainee accountant at PwC from October 2006 to August 2009 and said he identified irregularities during two investment fund audits. He raised them with superiors, who took a different view. He was later dismissed; the judgment said his dismissal was the subject of a claim before the Employment Appeals Tribunal.
In September 2011, he complained to the Chartered Accountants Regulatory Board (CARB), alleging failures to comply with accounting and audit standards. CARB said in September 2012 that its review found the accounting complied with the relevant standards and that there was no evidence PwC may have been guilty of misconduct. It did not open a formal complaint file. Mr Nowak sought an independent review, but was told there was no right to one because no formal file had been opened.
Mr Nowak then complained to the Authority, raising concerns about CARB’s decision and process. On 26 June 2014, the Authority said it had identified no issue warranting further examination under sections 23 or 24 of the Act. He obtained leave to seek certiorari quashing that decision, a declaration that it was unlawful and an order requiring a statutory inquiry. His stated grounds were that the decision was irrational or unreasonable and that reasons had not been given.
The judge said the Authority’s role was oversight of accountancy bodies’ investigation and disciplinary procedures, not an appeal body reviewing the merits of individual complaints. The statutory power to initiate an inquiry was discretionary, and the court would require clear evidence before interfering on grounds of irrationality. It found no such evidence. The judge also rejected Mr Nowak’s allegation of bad faith, noting that it was not a ground for which leave had been granted and that the evidence relied on had been answered in an affidavit that Mr Nowak did not seek to test by cross-examination.
The Authority’s letter said Mr Nowak’s complaint and supporting documents had been considered in detail, and that no issue warranted further examination. The judge held that this was a sufficient reason, adding that Mr Nowak had not asked the Authority to elaborate before starting judicial review proceedings.
The court further found that Mr Nowak had shown no detriment arising from the decision and no tangible benefit he would obtain even if an inquiry ultimately led to a sanction against PwC. The application was dismissed.