In addition, ASIC said in a statement it also had concerns these auditors were failing to comply with continuing professional development (CPD) requirements and otherwise not being a fit and proper person.
Disqualified SMSF auditors
ASIC noted the disqualification of the following SMSF auditors:
- Kent Hacker of Queensland, for significant auditor independence breaches, deficiencies in auditing asset valuation and compliance arm’s-length transaction requirements, and for otherwise not being a fit and proper person as he had failed to comply with undertakings made to the ATO.
- Sofranios Vlahos of New South Wales, for significant auditor independence breaches.
- Stephen Sproats of New South Wales, for significant auditor independence breaches and deficiencies in auditing asset valuation and ownership, compliance with arm’s-length transaction requirements and compliance with borrowing requirements.
- Mark Higgins of New South Wales, for significant auditor independence breaches, deficiencies in auditing asset valuation and compliance with financial reporting requirements, failing to obtain signed financial statements and breaching CPD requirements.
SMSF auditors given suspension and conditions imposed
ASIC also said it imposed one-year suspensions and conditions on the following SMSF auditors:
- Ronald Cuthbertson of Western Australia, for deficiencies in auditing the valuation of fund assets, compliance with separation of fund and trustee asset ownership, compliance with related-party and arm’s-length requirements and compliance with personal use and collectable asset rules; and failing to report a fund contravention to the ATO as required.
- Malcolm Heasman of Western Australia, for auditor independence breaches; deficiencies in engaging, planning and performing audits; and deficiencies in auditing the valuation of assets, compliance with separation of fund and trustee asset ownership, and compliance with financial reporting requirements.
“Mr Cuthbertson must undertake a peer review process for his audits, complete specific courses of studies, including in ethics and audit, and pass an SMSF competency exam,” ASIC said.
“Mr Heasman must undertake a peer review process for his audits, certify to ASIC that he has not conducted audits in specific circumstances related to independence, complete specific courses of study, including in ethics and audit, review tools and templates to ensure they are up to date and complete, and pass an SMSF auditor competency exam.
“Mr Heasman is also restricted from conducting any audits in independence threat situations regardless of any safeguards.”
ASIC and the ATO should set prescriptive standards with respect to independence rather than the self interested Standards Board
Just part of ASICs regulatory focus on the small. I wonder if ASIC will ever test the independence standard on the large vertically integrated administration firms that provide accounting / taxation / planning & auditing services under the same banner.
This model should be tested particularly when price incentives or worse price disincentives are utilised to ensure the audit remains within the group structure
your comment regarding independence is insightful , I bet the ato let the second tier and larger smaller firms audit their own work , so called Chinese walls
All this ASIC activity must be a spin off from the financial services royal commission – i didn’t realise SMSF auditors were part of that probe.
It’s not
Ato are auditing a lot of smsf and refer the smsf auditor behaviour to asic for action there will be many simalar results over the next few years until smsf auditors realise they need to apply audit standards and associated procedures Additionally no k e of those mentioned were running so called low cost business models
So when does the Royal Commission into Accounting start??
Can’t wait for the next time the TPB suspend come Tax Agents – oh wait… they don’t review them at all do they!
I wish ASIC operated in accordance with the standards its expect form others. Remove this function from ASIC and pass it to the ATO. ASIC are jokes and hypocrites.
The ato would of audited the funds and referred the issues to the asic.