AAT overturns ASIC disqualification of SMSF auditor

The Administrative Appeals Tribunal has overturned the disqualification of an SMSF auditor by ASIC.

Mr Taylor SC, Senior Member for the AAT, said in his decision that he was satisfied that “Mr [Manoj] Abichandani is a fit and proper person to be an approved SMSF auditor for the purposes of the Act” and did not make misleading statements to ASIC. As such the AAT set aside the ASIC decision and decided that Mr Abichandani is not disqualified from being an approved SMSF auditor – he has been reinstated.

In November 2015 ASIC announced that it had disqualified Mr Abichandani after determining that he had “provided untruthful statements that were deliberately misleading and that he was not a fit and proper person to be an approved SMSF auditor”. Following this decision by the regulator Mr Abichandani applied for a review by the AAT.

Much of the AAT decision deals with correspondence between Mr Abichandani and ASIC, following from a referral to ASIC, as regulator of SMSF auditors, from the ATO. Some of this correspondence dealt with the role Mr Abichandani played in the audit of three SMSF audits, which also involved another approved SMSF auditor. It was in this correspondence that ASIC claimed Mr Abichandani had made false statements.

“ASIC’s primary findings, and the submissions it pursued in the review proceedings, explicitly characterised Mr Abichandani as having made knowingly false statements for the purpose of misleading it in the exercise of its statutory functions,” says the AAT decision.

However this was rejected by the AAT, with ASIC’s contention about one of the statements described as “inherently incredible”.

“…ASIC’s contention postulates that Mr Abichandani sought to avoid the imposition of conditions on his registration by admitting to ASIC that, on no less than three occasions, he had signed audit reports with ‘no understanding’ of the findings they contained or the underlying audit work. The objective reality is that conveying such a proposition to ASIC, and intending that it should be accepted as accurate, would unarguably have demonstrated Mr Abichandani’s fundamental disregard of his audit obligations and responsibilities. Such a fundamentally dishonest, and repeated, disregard of his audit obligations would have demonstrated his unarguable unfitness for registration. Yet this inevitable consequence was never addressed anywhere in ASIC’s decision reasons or its submissions – written or oral.”

“In the present matter I am firmly of the view that Mr Abichandani made no intentionally false statement to ASIC. I am also of the firm view that neither of his August and September 2015 email statements impugned by ASIC was misleading. Certainly neither statement was intentionally misleading. I do not accept ASIC’s contention that Mr Abichandani made any knowingly false statement – either to the ATO, ASIC or in the course of the present proceedings…”

“I have had regard to Mr Abichandani’s uncontested qualifications and experience, his past significant period of registration, and the unchallenged and impressive supporting commendations he provided. I have also concluded that there is no substance in the criticisms ASIC made of his August and September 2015 email statements,” said Mr Taylor SC in the decision.

The full AAT decision is available here: Abichandani and Australian Securities and Investments Commission [2016] AATA 879.

ASIC has issued the following statement:

Following a decision of the Administrative Appeals Tribunal (AAT) on 8 November 2016, Mr Manoj Abichandani’s registration as an approved SMSF auditor has been reinstated.

In October 2015, ASIC disqualified Mr Abichandani from being an approved SMSF auditor (refer: 15-356MR).

Mr Abichandani applied for a review of ASIC’s decision in the AAT. In deciding to set aside ASIC’s decision, the AAT found that Mr Abichandani had not intentionally made false statements to ASIC and that Mr Abichandani was a fit and proper person to be an approved SMSF auditor.

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