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Monday 6 August 2012

12-186MR Former ABC Learning Centres auditor prevented from auditing companies for five years

ASIC has accepted an enforceable undertaking (EU) from Brisbane auditor, Mr Simon Andrew Peter Green.

This EU follows ASIC’s investigation into Mr Green’s conduct of the audit of the 2007 financial report of ABC Learning Centres Limited (ABC). At the time, Mr Green was a partner with the former Brisbane firm of Pitcher Partners, which was dissolved on 28 November 2008.

Under the EU, Mr Green is prevented from practising as a registered auditor for a period of five years (period of suspension).

He is also required during the period of suspension to:

  • notify any employer of the EU and if he is retained directly by a client, then inform the client of the EU
  • regularly report to ASIC any other audit and/or review work under the Corporations Act 2001 he undertakes outside of what only a registered auditor can perform, and
  • participate, in each 12 month period, in an additional 15 hours of continuing professional development above the mandatory requirements of the ICAA.

Following conclusion of the period of suspension, he is required to submit his first five audits for review by a registered company auditor approved by ASIC.

‘Auditors are important gatekeepers who are relied upon to provide assurance and market confidence in the quality of financial reports’, ASIC Chairman, Greg Medcraft said.

‘ASIC continues to focus auditors on the importance of applying professional scepticism and obtaining sufficient audit evidence to support their conclusions. It is vital that auditors apply appropriate skills, experience and scepticism in identifying and responding to risks, reviewing accounting treatments, gathering audit evidence and in judgement areas such as going concern assessments, added Mr Medcraft.

ASIC is of the view that during the audit of ABC’s 2007 financial report, Mr Green failed to perform adequately and properly his duties as an auditor. In particular, ASIC is of the view that Mr Green failed to:

  • obtain sufficient appropriate audit evidence:
    • in relation to the correct accounting treatment for various fees which resulted in a significantly material overstatement of ABC’s revenue
    • to support the classification of income items – the consequence being that items not from the provision of childcare services were incorrectly classified as revenue which resulted in the overstatement of ABC’s revenue
    • to enable a reasonably competent auditor to conclude that ABC was a going concern
    • to support his conclusions with regard to related party transactions, property plant and equipment, wages and salaries, and
  • to support his opinion that ABC’s 2007 financial report was free of material misstatement,
  • adequately document the testing undertaken in respect to the risk of fraud
  • develop audit procedures to deal with assessed risks
  • perform sufficient and appropriate subsequent events procedures, and
  • use professional judgement and scepticism when auditing ABC's 2007 financial report.

Mr Green acknowledges ASIC’s views are reasonably held.


ABC was a publicly listed company whose main business was the provision of childcare services and education. It is now known as ZYX Learning Centres Limited and is in the process of being wound up.

View the enforceable undertaking

Last updated: 06/08/2012 12:00