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19-299MR ASIC acts against SMSF auditor misconduct
ASIC has moved to disqualify or add conditions to the registration of three auditors of self-managed superannuation funds (SMSFs).
The actions arose following ASIC concerns about failures to meet requirements, including independence standards and auditing standards, or failing to comply with further conditions on the approved SMSF auditor’s registration.
SMSF auditors disqualified
ASIC disqualified the following people from being SMSF auditors:
- Darryl Iseppi, of Queensland – for significant auditor independence breaches and deficiencies in auditing the acquisition of shares, borrowings, valuation of assets, compliance with in-house asset requirements and regarding a non-commutable life pension.
- Alan Bentwitch, of New South Wales – for failing to comply with a condition to have peer reviews of three of his audits. The condition was imposed following a past referral from the ATO.
ASIC imposed conditions on the following SMSF auditor:
- Richard Hennessy, of New South Wales – for deficiencies in maintaining auditor independence and in audit work, including auditing the ownership and valuation of fund assets and ensuring compliance with legislative borrowing requirements.
The conditions imposed included having audits reviewed by another SMSF auditor, not auditing funds where there are independencethreats irrespective of the safeguards, completing specified courses in ethics and auditing, and providing his professional association with a copy of the conditions.
Information about these three auditors was referred to ASIC by the Australian Taxation Office under section 128P of the Superannuation Industry (Supervision) Act 1993 (SIS Act).
From 1 July 2013, the SIS Act required all auditors of SMSFs to be registered with ASIC. This was to ensure that all SMSF auditors meet the base standards of competency and expertise.
ASIC and the ATO work closely together as co-regulators of SMSF auditors. The ATO monitors SMSF auditor conduct and may refer matters to ASIC for possible action such as disqualification or suspension of their registration. ASIC may also impose conditions on an SMSF auditor.
SMSF trustees and members can check whether their auditor is registered and what conditions are on their registration by searching ASIC's SMSF auditor register. ASIC also maintains a public register of disqualified SMSF auditors. ASIC’s registers are available via connectonline.asic.gov.au.