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Breaches include failures to lodge annual statements and lack of independence.
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ASIC strikes off five SMSF auditors and tightens leash on three
12 July 2022
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ASIC has deregistered five SMSF auditors and imposed conditions on the registration of three others for a range of breaches or for not being fit and proper for the task.
The breaches included failing obligations on auditing and assurance standards, independence requirements and registration conditions.
One of the auditors was identified by ASIC while the rest were referred by the ATO.
Disqualifications
Ross Casperson of Bundall, Queensland, was disqualified in April for failing to meet additional conditions imposed on his registration that specified having five SMSF audits peer-reviewed and responding to written information requests in time.
Ian Good of Glen Waverley, Victoria, was disqualified in April for not being a fit and proper person because he did not provide audit files as requested and otherwise acted inappropriately in relation to ATO attempts to review his work.
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Clifton Hammond of Mirboo North, Victoria, was disqualified in March 2022 for failing to maintain independence by auditing his own SMSF and for failing to lodge with ASIC an approved SMSF auditor annual statement.
John Pascoe of Nedlands, Western Australia, was disqualified in March 2022 for failing to obtain sufficient audit evidence and inadequately documenting audits in significant areas across three funds. These were in relation to the existence, repayment and arm’s length nature of a loan, ownership and market value of fund assets, ownership of a collectable asset, the level of carried forward tax losses and the appropriate recognition for management fees.
Phil Scahill of Parramatta, NSW, was disqualified in March 2022 for failing to lodge with ASIC an approved SMSF auditor annual statement and otherwise not being a fit and proper person to be an SMSF auditor.
Registration conditions imposed
Andrew Hunt of Parramatta, NSW, for breaching independence requirements by auditing an SMSF for which he prepared the financial statements and for failing to obtain sufficient evidence in relation to a number of fund investments, as well as a range of other failures.
The conditions include requiring him to take a course on conducting SMSF audits and pass ASIC’s SMSF auditor competency exam.
Terence Murphy of Forster, NSW, for failing to obtain sufficient audit evidence on the market value of properties, compliance with limited recourse borrowing arrangements, in-house asset, related party and arm’s length provisions.
The conditions include not performing any SMSF audits of clients for whom he prepares accounts or financial statements, engaging an independent SMSF auditor to review his SMSF audit tools, template and methodology and review three SMSF audit files as well as taking a course and passing ASIC’s SMSF auditor competency exam.
John Phillips of Melbourne, Victoria, for breaching independence requirements where he audited an SMSF for which his staff prepared the financial statements and for failing to obtain sufficient appropriate evidence to support the market value of properties held by a fund or the storage and existence of collectables of another fund.
The conditions include taking a course on conducting SMSF audits and having three SMSF audit files reviewed by an independent auditor.
ASIC commissioner Sean Hughes said: “ASIC expects SMSF auditors to adhere to the ethical and auditing standards given the fundamental role they play in promoting confidence in the SMSF sector.
“ASIC will continue to take action where the conduct of SMSF auditors is inadequate. These actions help protect the integrity of SMSF audits.”
These actions are in addition to the 10 SMSF auditors that ASIC cancelled in May because of their failures to lodge annual statements.
ASIC and the ATO work closely together as co-regulators of SMSF auditors.
SMSF auditors can request that ASIC reconsider a decision it has made against them and they may apply to the AAT for further review.
Disqualified auditors are placed on ASIC’s public banned and disqualified register.
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