ASIC, Auditing

ASIC wins appeal to disqualify auditor

ASIC disqualification auditor

ASIC has won the latest round in a series of actions regarding the disqualification of an SMSF auditor, with a final determination yet to be made.

The Australian Securities and Investments Commission (ASIC) has successfully appealed a move by the Administrative Appeals Tribunal (AAT) to set aside the disqualification of an SMSF auditor first imposed in 2018, but lifted in 2020, effectively disqualifying him again pending another decision by the AAT.

ASIC brought the appeal in the Federal Court regarding the decision of the AAT not to disqualify the registration of Queensland SMSF auditor John Gilliland.

Gilliland was first disqualified in 2018 for breaching auditor independence requirements in regards to auditing his own fund, the fund of an immediate family member and the fund of a close family member.

Following that decision by the corporate watchdog, he sought a review by the AAT, which set aside ASIC’s decision in August 2020, leading to the regulator appealing the tribunal’s decision.

In handing down her decision, Justice Berna Collier found general deterrence was a relevant consideration in deciding whether to disqualify a person as an approved SMSF auditor under section 130F of the Superannuation Industry (Supervision) Act 1993.

Additionally, Justice Collier found the AAT had not considered general deterrence when making its decision and sent the matter back to the tribunal to have it redetermined.

“In the circumstances, it is clear that the AAT erred in failing to take into account a relevant factor in deciding whether a person should be disqualified as an auditor, namely principles of general deterrence. In doing so, I am also satisfied that the tribunal failed to take into account clearly articulated submissions by ASIC to that effect,” Collier said.

“I am satisfied that the decision of the AAT is legally flawed and should be set aside. It is appropriate that the matter be remitted to the AAT for determination according to law.”

As a result of the Federal Court’s decision, Gilliland is again disqualified as an SMSF auditor, pending a final decision by the AAT.

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