In the quarter ending 31 December 2023, ASIC took action against nine self-managed superannuation fund (SMSF) auditors where we formed the view that conduct did not meet the required standards. This included concerns about compliance with auditing and assurance standards, independence requirements, registration conditions, or for not being a fit and proper person to remain an SMSF auditor.
ASIC Deputy Chair Sarah Court said, 'SMSF auditors are responsible for auditing over 611,000 SMSFs with total estimated assets of almost $900 billion. In this privileged position, they play a key role in upholding the integrity and confidence of the SMSF sector. ASIC will continue to take action where conduct falls short.'
Between 1 October 2023 and 31 December 2023, ASIC:
- disqualified five SMSF auditors,
- imposed additional conditions on two SMSF auditors, and
- cancelled the registration of two SMSF auditors.
Stephen Bray, Kerpal Harnam, Terence Murphy, Johann Preller and David Sidhu were disqualified from being SMSF auditors. Their names have been placed on ASIC's public banned and disqualified register and are not eligible to reapply for registration. Mr Murphy requested ASIC review its disqualification decision which is currently under consideration.
Timothy Davidson and Kylie Wilson had additional conditions imposed on their SMSF auditor registration. Conditions are specific to the auditor (see the SMSF Auditor register), and can require undertaking additional professional development, passing the SMSF auditor competency exam, having independent reviews of SMSF audit files and/or audit tools, templates and methodology and notifying their professional accounting association of the additional conditions.
Vincenzo Dissidomino and Vincent Crowe had their SMSF auditor registration cancelled.
Of the nine SMSF auditors mentioned here, five were referred to ASIC by the Australian Taxation Office (ATO).
Background
Approved SMSF auditors are registered with ASIC under the Superannuation Industry (Supervision) Act 1993 (SIS Act).
ASIC and the ATO work closely together as co-regulators of SMSF auditors. The ATO monitors SMSF auditor conduct and can refer matters to ASIC. ASIC also monitors the SMSF auditor population for non-compliance and is empowered to disqualify, suspend, cancel or impose additional conditions on the registration of SMSF auditors.
ASIC may make an order disqualifying or suspending a person from being an approved SMSF auditor, under section 130F of the SIS Act, if the person has failed to carry out or perform adequately and properly the duties and functions of an auditor or is not a fit and proper person to be an approved SMSF auditor. A disqualified SMSF auditor is placed on ASIC's public banned and disqualified register at connectonline.asic.gov.au and is not eligible to reapply for registration.
ASIC may impose conditions on an SMSF auditor's registration under section 128D of the SIS Act or may cancel the registration of an SMSF auditor under section 128E of the SIS Act for non-compliance with conditions or failing to lodge annual statements in the required timeframe.
SMSF auditors have the right to appeal decisions ASIC makes in relation to their registration under the SIS Act. They may request that ASIC reconsider a decision it has made against them. If the decision is confirmed or varied the SMSF auditor may apply to the Administrative Appeals Tribunal for further review of the decision.
Further information can be found on ASIC's website and in Regulatory Guide 243 Registration of self-managed superannuation fund auditors.
SMSF trustees and members can check whether their auditor is registered, suspended or has conditions imposed on their registration by searching ASIC's SMSF Auditor register.
