ASIC has suspended the registration of Wayne John Wessels, the former auditor of whitegoods distributor Kleenmaid, following a successful application to the disciplinary body, the Companies Auditors and Liquidators Disciplinary Board (CALDB).

The suspension started on 29 November 2013 and is for three years.

ASIC alleged, and the CALDB found, Mr Wessels failed to carry out and perform adequately and properly his duties as lead auditor of Kleenmaid’s financial report for the year ended 30 June 2008.

Specifically, the CALDB found, among other things, Mr Wessels should have brought a higher degree of professional scepticism to his consideration of Kleenmaid management’s assumption of the company’s going concern and that there were deficiencies in the standard of his evidence and documentation of audit work done.

Download the CALDB’s media release and final orders

Background

In February 2012 ASIC charged two former Kleenmaid directors and another person whom ASIC alleges was a de facto director, with fraud and insolvent trading. In March 2014 they were ordered to stand trial following a committal hearing (refer: 14-064MR).

At the time of his conduct Mr Wessels was a partner of PKF’s East Coast Practice.

The CALDB is an independent statutory body under the Corporations Act and has the power to cancel or suspend the registration of a liquidator or auditor.

Going concern is a fundamental principle underlying the preparation of financial reports. Australian Accounting Standards require directors to consider whether there are material uncertainties that would lead to significant doubt about whether a company’s will continue in business in the foreseeable future, and to make adequate disclosures in the financial report if uncertainties are identified. Auditors are required by Australian Auditing Standards to evaluate the directors’ assessment of the company’s ability to continue as a going concern.