ASIC disqualifies 3 SMSF auditors in major swoop - July 2019

Ms Tran was disqualified for not being a fit and proper person. ASIC said this follows Ms Tran being deregistered from a statutory role by another regulator and in consideration of the reasons for their decision.

Mr Wright was disqualified for failing to obtain sufficient appropriate audit evidence in the audit of an SMSF in relation to the property and investments in unlisted trusts being reported at market value, borrowings including compliance with limited recourse borrowing arrangements, the purchase of properties, lease agreements, transactions with related parties, liabilities and expenses, and failing to comply with CPD requirements.

Mr Wood was disqualified for signing an inappropriate audit report, failing to provide audit files to the Australian Taxation Office (ATO) on a timely basis despite multiple requests, failing to lodge his annual statement within the required time frame and otherwise not being a fit and proper person.

ASIC has also imposed conditions on the registrations of a number of SMSF auditors.

Stephen Bray of the Australian Capital Territory had conditions imposed for deficiencies in auditing fund assets and loans, a lack of understanding of independence requirements and failing to comply with CPD requirements.

Ross Casperson of Queensland also had conditions imposed for deficiencies in auditing fund investments and borrowings and complying with CPD requirements as well as failing to obtain signed financial statements.

Dharambir Ghangas of Western Australia has also had conditions imposed which relate to deficiencies in auditing fund investment properties, other assets and motor vehicle expenses.

ASIC also imposed conditions on Gerald Adams of Victoria for auditor independence breaches and deficiencies in auditing loans and fund assets.

It also took action against Rohan Dyson of Victoria, Sandra Koschel of Queensland and Rodney Grosvenor of New South Wales for auditor independence breaches.

David John Simpson of New South Wales has had conditions imposed following auditor independence breaches, deficiencies in auditing fund borrowings and assets, not complying with CPD requirements and failing to provide documentation to the ATO within a reasonable time frame.

Geoffrey Sexton of Queensland had conditions imposed for auditor independence breaches and deficiencies in auditing fund borrowings, assets and income.

ASIC imposed conditions on John McCann of New South Wales for auditor independence breaches and deficiencies in auditing fund borrowings, assets, income and expenditure.

Leo Sheppet of Victoria has had conditions imposed for auditor independence breaches and deficiencies in auditing fund borrowings and assets.

Dennis Kronheim of New South Wales has had conditions imposed for auditor independence breaches, deficiencies in auditing fund assets and borrowings, and not complying with CPD requirements.

Michael Lane of New South Wales has had conditions imposed for deficiencies in auditing income and audit documentation.

Thomas Swanton of Queensland has had conditions imposed for deficiencies in auditing fund assets, member benefits and related-party transactions.

ASIC stated that information about the above auditors, with the exception of Ms Tran, was referred to ASIC by the ATO under section 128P of the Superannuation Industry (Supervision) Act 1993 (SIS Act).

The various conditions imposed across these auditors were:

Peer reviews – Having three to five audits, for one or two financial years, reviewed by an independent SMSF auditor for compliance with auditing standards.

Restricted audits – Being restricted from conducting any audits in independence threat situations as illustrated in specific independence guidance regardless of any safeguards.

Independence assessments – Performing and reporting on specific independence threat assessments for all clients.

Professional associations – Providing a copy of the conditions to their professional association.

Education – Completing specific courses of study, including in ethics and audit.

Annual declarations – Providing ASIC with annual declarations about specific independence situations.

Exam – Sitting and passing the SMSF auditor competency exam.

Proof of CPD – Providing proof of compliance CPD requirements annually for three years.

Responding to requests – Responding to written requests by the ATO or ASIC within the times specified.

ASIC commissioner John Price said SMSF auditors play a fundamental role in promoting confidence in the SMSF sector.

“ASIC will continue to take action where the conduct of SMSF auditors is inadequate,” Mr Price said.