Disqualifications and Additional Conditions
Out of the eight auditors, five – Paul Barry, Stephen Funder, Bruce Jones, Gregory Leggett, and Malcolm Orman – have been disqualified from acting as SMSF auditors. Their names have been added to ASIC's public banned and disqualified register, and they will not be eligible to reapply for registration in the future.
Stephen Funder, however, has chosen to challenge the disqualification decision and has applied to the Administrative Appeals Tribunal (AAT) to have his case reviewed.
On the other hand, three auditors – Toby Dodd, Mark Gregson, and Clayton Lawrence – have been subjected to additional conditions on their SMSF auditor registration. These conditions are specific to each auditor and may include requirements such as undertaking further professional development, undergoing independent reviews of SMSF audit files and tools, templates, and methodology, and informing their professional accounting association about the additional conditions.
Reasons for Breach
The breaches identified by ASIC include failure to meet auditing and assurance standards, violating independence requirements, not adhering to registration conditions, or demonstrating conduct that suggests they are not fit and proper to remain registered as SMSF auditors.
Compliance Program and Statistics
ASIC's recent actions against these SMSF auditors are a part of its ongoing compliance program. In the past year alone, ASIC has taken action against a total of 26 SMSF auditors who failed to meet the required independence and auditing standards or whose conduct raised concerns about the integrity of SMSF audits.
The SMSF sector is a significant part of the Australian financial landscape, holding over $865 billion in assets across more than 600,000 funds. Therefore, it is crucial that SMSF auditors fully comply with their regulatory obligations. ASIC remains committed to taking appropriate action whenever the conduct of SMSF auditors falls short of expectations.
Referrals and Cooperation
Seven of the auditors were brought to ASIC's attention by the Australian Taxation Office (ATO), highlighting the importance of agencies working together to ensure compliance within the SMSF sector. Additionally, one SMSF auditor's information was disclosed to ASIC by another Australian government body, demonstrating the collaborative effort in maintaining regulatory standards.
Published: Monday 24th July, 2023
Please Note: If this information affects you or is relevant to your circumstances, seek advice from a licensed professional.
