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Monday 11 April 2022

22-088MR Former auditor of Big Un Limited charged with making a false or misleading statement

On 8 April 2022, the former auditor of Big Un Limited, Mr Graham Rothesay Swan, appeared in the Perth Magistrates Court charged with making a false or misleading statement in his independent audit report of Big Un for the financial year ended 30 June 2017.

As lead auditor for the 2017 audit of Big Un, Mr Swan allegedly signed an independent auditor’s report which stated that the financial report of Big Un gave a true and fair view of the group’s financial position and of its financial performance for the financial year ending 30 June 2017 and that it complied with the Corporations Act and with Australian Accounting Standards. By signing this report, ASIC alleges Mr Swan made a statement that was false or misleading.

Big Un was placed in a trading halt and suspended from quotation in February 2018.  In August 2018, administrators were appointed and Big Un was removed from the official ASX list. ASIC’s investigation into Big Un continues.

Auditors are important gatekeepers to the market and play a key role in ensuring that financial statements are accurately stated so that investors can rely upon them when making decisions to invest in a company.

The maximum penalty for a breach of s1308(2) of the Corporations Act when prosecuted on indictment is five years imprisonment or a fine of $42,000, or both.

The charge was adjourned to 2 June 2022 and Mr Swan was released on bail.

The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.

Background

In March 2022, the Companies Auditors Disciplinary Board (CADB) suspended the registration of Jakin Leong Loke for 12 months due to his involvement in the 2017 audit of Big Un (22-049MR).

Mr Swan voluntarily cancelled his registration as a company auditor in October 2020.

This is the second time ASIC has brought criminal charges arising from the failure to comply with auditing standards. On 17 August 2021, former auditors of Halifax Investment Services Pty Ltd, Mr Robert James Evett and EC Audit Pty Ltd (formerly Bentleys NSW Audit Pty Ltd) were convicted and sentenced to pay a fine of $10,000 and $40,000 respectively for failing to conduct audits in accordance with auditing standards (21-218MR).

Editor's note:

The matter was adjourned for further mention on 1 July 2022 in the Perth Magistrates Court with bail conditions renewed on the same terms and conditions.

Editor's note 2:

The matter was adjourned for further mention on 21 July 2022 in the Perth Magistrates Court with bail conditions renewed on the same terms and conditions.

Last updated: 30/06/2022 09:37