ASIC has acted against eight self-managed superannuation fund (SMSF) auditors for breaches of their obligations. This included breaches of auditing and assurance standards, independence requirements, registration conditions, or because ASIC was satisfied the individual was not a fit and proper person to remain registered.

From 1 April 2023 to 30 June 2023, ASIC:

• disqualified five SMSF auditors; and
• imposed additional conditions on three SMSF auditors.

This is in addition to the cancellation of 413 SMSF auditors (22-121MR, 23-012MR and 23-150MR), as part of ASIC’s recent compliance program.

ASIC Commissioner Danielle Press said, ‘In the last year, ASIC has acted against 26 SMSF auditors who failed to meet the independence and auditing standards, or whose conduct called into question the integrity of SMSF audits. The SMSF sector holds more than $865 billion in assets in over 600,000 funds and it is crucial that SMSF auditors comply with their regulatory obligations. ASIC will continue to take action where the conduct of SMSF auditors is inadequate.’

Paul Barry, Stephen Funder, Bruce Jones, Gregory Leggett and Malcolm Orman were disqualified from being SMSF auditors. Their names have been placed on ASIC’s public banned and disqualified register and they are not eligible to reapply for registration. Mr Funder has applied to the Administrative Appeals Tribunal for the disqualification decision to be reviewed.

Toby Dodd, Mark Gregson and Clayton Lawrence had additional conditions imposed on their SMSF auditor registration. Conditions are specific to the auditor (see the SMSF Auditor register), and can require undertaking additional professional development, having independent reviews of SMSF audit files and audit tools, templates and methodology, and notifying their professional accounting association of the additional conditions.

Seven SMSF auditors were referred to ASIC by the Australian Taxation Office (ATO) and official information about one SMSF auditor was disclosed to ASIC by another Australian government body.

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. 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.

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 appeal decisions ASIC makes in relation to them 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 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.