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ASIC, Auditing

ASIC adds conditions to auditors registrations

ASIC auditors conditions

ASIC has taken disciplinary action against two SMSF auditors, adding conditions to their registration after independence breaches and audit quality deficiencies were uncovered.

ASIC has added a range of conditions to the registration of two SMSF auditors after a referral from the ATO under the co-regulation arrangements that exist between the two regulators.

The conditions were imposed on William Krammer of Victoria and Yuk Wong of New South Wales for auditor independence breaches and audit quality deficiencies.

In relation to Krammer, ASIC stated these breaches and deficiencies included not obtaining engagement letters, trustee representation letters and sufficient appropriate audit evidence to support the ownership and market value of assets.

The conditions imposed on Krammer require that he complete additional training on SMSF audits and ethics, sit and pass the SMSF auditor competency exam, certify his independence to ASIC periodically, have three SMSF audits reviewed by an ASIC approved independent quality reviewer and advise his professional body of the conditions.

The regulator stated the breaches and deficiencies related to Wong include not obtaining engagement letters, trustee representation letters and sufficient appropriate audit evidence in relation to trust deeds, investment strategies, asset ownership and valuations, borrowing arrangements, rental income and related parties.

As such, Wong is required to complete additional training on SMSF auditing and ethics, sit and pass the SMSF auditor competency exam, provide evidence of his compliance with continuing professional development requirements, review and revise tools and templates used to perform and document SMSF audits, and advise his professional body of the conditions.

Information about Krammer and Wong was referred to ASIC by the ATO under section 128P of the Superannuation Industry (Supervision) Act 1993 as the two bodies act as co-regulators of SMSF auditors.

The ATO monitors SMSF auditor conduct and may refer matters to ASIC for possible action, such as disqualification or suspension of their registration.

ASIC may also impose conditions on the registration of SMSF auditors, which if breached may result in suspension or disqualification of their registration as an SMSF auditor.

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