During the first half of 2024, ASIC took action against the registration of 13 approved self-managed superannuation fund (SMSF) auditors.
ASIC's concerns covered a range of topics, including breaches of auditing and assurance standards, independence requirements, continuing professional development obligations, or for not being a fit and proper person to remain an approved SMSF auditor.
This action is in addition to the 15 SMSF auditors, engaged in 'in-house audits,' that ASIC announced it acted against in March 2024 (24-043MR).
SMSF auditors are key gatekeepers responsible for the growing SMSF sector, providing assurance for 625,609 SMSFs with total estimated assets of over $990 billion. SMSF auditors are crucial to upholding the integrity and confidence in the SMSF regime. ASIC will continue to take action where conduct is not up to standard.
Between 1 January 2024 and 30 June 2024, ASIC:
- disqualified seven SMSF auditors,
- suspended one SMSF auditor (after the original disqualification decision was varied upon their request for reconsideration),
- imposed additional conditions on four SMSF auditors, and
- cancelled the registration of one SMSF auditor.
Tak Cheng, Lin Chou, Kristian Convery, John Giannicos, Mark Gynther, John Hamilton, Md Nazrul Islam and Kylie Wee were disqualified from being SMSF auditors. All eight SMSF auditors requested ASIC reconsider its disqualification decision and the disqualifications in each case were confirmed, except Ms Wee's application.
Ms Wee's disqualification was in effect from 14 June 2024 until 27 August 2024. On 27 August 2024, Ms Wee's disqualification was revoked and varied, upon her request for reconsideration, to a suspension of three years and three months and additional conditions were imposed on her registration for completion after the suspension period. Ms Wee's suspension commenced on 19 September 2024.
Mr Islam has applied to the Administrative Appeals Tribunal (AAT) for review of the confirmed disqualification decision and this review is ongoing. Mr Convery also applied to the AAT for a stay and review of the confirmed disqualification decision. Both of Mr Convery's applications were dismissed by the AAT.
Mohammed Bhuiyan, Paul Judge, Yan Liu and Liushui Xie had additional conditions imposed on their SMSF auditor registration. Conditions are specific to the auditor and the relevant deficient conduct (see the SMSF Auditor register), and impose various obligations such as undertaking additional professional development, passing the SMSF auditor competency exam and independent review of SMSF audit files.
Max Haber had his SMSF auditor registration cancelled.
All SMSF auditors were referred to ASIC by the Australian Taxation Office (ATO).
ASIC's approved SMSF auditor decisions in FY24
Between 1 July 2023 and 30 June 2024, ASIC has made 46 decisions in relation to the registration of approved SMSF auditors:
- disqualified 15 SMSF auditors,
- imposed additional conditions on 24 SMSF auditors,
- suspended one SMSF auditor, and
- cancelled the registration of six SMSF auditors.
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. The order disqualifying a person from being an approved SMSF auditor must be published by notifiable instrument detailed in ASIC's Regulatory Resources. 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 unless the disqualification is revoked.
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 seek review of decisions that 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 confirmed or varied 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.
