ASIC has taken action against seven SMSF auditors, including disqualifications, suspensions, and imposing conditions on registrations.
“The actions arose following ASIC concerns about audit quality, independence issues, failures to meet the fit and proper person criteria or other matters,” said ASIC.
Two of the people, Strat Karnas of Victoria and Keith Knight of the ACT, were disqualified as SMSF auditors. Both, according to ASIC, failed to have their own SMSF audited, falsely represented on the Annual Return that their fund had been audited and misused their auditor number to lodge the Annual Return for their own SMSFs. Knight had also failed to “obtain sufficient appropriate audit evidence in SMSF audits on property valuations and title of assets, which were not held in the name of the corporate trustee” and failed to use the prescribed audit report format.
Trevor Ward of New South Wales has his registration as an SMSF auditor cancelled for failing to comply with CPD requirements, failing to hold an appropriate level of PI insurance and not lodging an annual statement for two years.
The motivations for Mr Ward not meeting the conditions of being a registered SMSF auditor are unclear from ASIC’s statement. The new ASIC fee of $899 to cancel a SMSF auditor registration has been criticised as “inappropriate”.
Ranjit Dadwal of Victoria was suspended as an SMSF auditor for two years, from 30 October 2018, for “not being a fit and proper person in that he had received criminal convictions for three offences”.
Joseph Carbone of South Australia was suspended as an SMSF auditor for two years, from 8 November 2018, and had conditions imposed for failing to report that an SMSF he audited hadn’t recorded a property at market value, failed to comply with the independence requirements by auditing an SMSF where his staff had prepared the financial accounts and statements, and failing to maintain records of CPD compliance.
Two SMSF auditors had conditions imposed on their SMSF auditor registration – Antonia Christine Quinn of Western Australia for “failing to obtain sufficient appropriate audit evidence in the audit of an SMSF on whether a lease was on an arm’s length basis, and for failing to comply with CPD requirements”, and Chooi Beh of Victoria for “failing to obtain sufficient appropriate audit evidence in the audit of an SMSF about the value of unlisted shares and whether monies advanced to the fund were borrowings”.
Other than for Mr Dadwal, information about these SMSF auditors was referred to ASIC by the ATO.
ASIC Commissioner John Price said: “Self-managed superannuation fund auditors play a fundamental role in promoting confidence in the SMSF sector, so it is crucial that they adhere to ethical, auditing and professional requirements. ASIC will continue to take action where the conduct of auditors falls short.”
ASIC points people wishing to check the registration status of their auditor to the register of SMSF auditors maintained by ASIC.