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A tax agent who successfully appealed his disqualification as an SMSF auditor will now face a fresh challenge from the corporate regulator in the Federal Court.
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ASIC refuses to back down from disqualification decision
10 September 2020
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Queensland tax agent John Gilliland had his registration as an approved SMSF auditor torn up by ASIC in 2018, after the corporate regulator found that he had breached auditor independence requirements in auditing a fund where, together with his wife and daughter, he was both a trustee and a member of.
Mr Gilliland, a practising agent since 1978, took his case to the Administrative Appeals Tribunal, where he successfully managed to overturn ASIC’s decision and was reinstated as an approved SMSF auditor.
The tribunal found that Mr Gilliland made an honest mistake in misinterpreting the provisions of APES 110 Code of Ethics for Professional Accountants by assuming that by drawing down his financial interest from $24,904.29 to $3,703.9, he had reduced his interest to an immaterial amount, and was entitled to conduct audits.
He later resigned as auditor of the fund after revisiting APES 110 and did so without being prompted by ASIC or the ATO.
The AAT was satisfied that he had not deliberately ignored the relevant rules and that he had made an interpretation error that was affected to some extent by unfortunate events in his life.
AAT deputy president Richard Hangar further noted that Mr Gilliland posed no risk to the public if he resumed his practice as an auditor, and would not undermine the integrity of the SMSF system in any way.
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“I accept that the applicant held a genuine but erroneous belief for a period of time that he was entitled to conduct the audits because he had reduced his interest to a minimal amount and had attempted to put himself at arm’s length from decision-making processes in the fund,” Mr Hangar said.
“I accept that he resigned as auditor when he appreciated his error even though he retrospectively sought to justify his erroneous approach.
“I also take into account that the [fund] was extraordinarily small, and that there is no evidence that the audit was in any fashion dishonest.”
However, ASIC has since confirmed that it has filed an application to appeal the AAT decision to the Federal Court of Australia.
The corporate regulator did not provide further details of its appeal.
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