ASIC, Auditing

ASIC sanctions several SMSF auditors

The Australian Securities and Investments Commission (ASIC) has disqualified, suspended or added conditions to the registration of several SMSF auditors for misconduct and failure to meet their obligations.

The corporate regulator’s actions follow concerns about issues including audit quality, independence issues and failures to meet the fit and proper person criteria.

ASIC commissioner John Price said: “Self-managed superannuation fund auditors play a fundamental role in promoting confidence in the SMSF sector so it is crucial that they adhere to ethical, auditing and professional requirements.

“ASIC will continue to take action where the conduct of auditors fall short.”

ASIC has disqualified Victoria’s Strat Karnas and the Australian Capital Territory’s Keith Knight for failing, as trustees of their own SMSFs, to have the funds audited, false representations in annual returns for their own SMSFs that an audit had been performed when it had not, and misusing their auditor numbers to lodge annual returns for their own SMSFs.

In addition, Knight failed to obtain sufficient appropriate audit evidence in SMSF audits on property valuations and title of assets that were not held in the name of the corporate trustee. He also failed to use the prescribed audit report format.

Trevor Ward from New South Wales had his registration as an SMSF auditor cancelled for failing to comply with continuing professional development (CPD) requirements, hold an appropriate level of professional indemnity insurance and lodge annual statements for two years.

Victoria’s Ranjit Dadwal was suspended as an auditor for two years from 30 October 2018 for not being a fit and proper person for having received criminal convictions for three offences.

South Australian Joseph Carbone was suspended for two years from 8 November 2018 for failing to fulfil various obligations, including reporting an SMSF audited by him had not recorded a property at market value, complying with independence requirements by auditing an SMSF where his staff prepared the accounts and financial statements, and maintaining appropriate records of compliance with CPD requirements.

Western Australia’s Antonia Christine Quinn and Victoria’s Chooi Beh had conditions imposed for failing to obtain sufficient appropriate audit evidence in the audit of an SMSF.

Quinn failed to obtain sufficient evidence on whether a lease was on an arm’s-length basis and for failing to comply with CPD requirements. She will be required to sit and pass ASIC’s SMSF audit competency exam and complete a course of study in SMSF audit, among other conditions imposed on her.

Beh will also need to sit and pass the exam and complete a course of study in SMSF audit. He will be required to inform his professional associations about these conditions as well.

Information about all auditors except Dadwal was referred to ASIC by the ATO under section 128P of the Superannuation Industry (Supervision) Act 1993.

SMSF trustees and members can check whether their auditor is registered or whether a person has been disqualified by searching ASIC’s SMSF auditor register.

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