Australia’s corporate regulator has pressed criminal charges against an accounting firm and one of its former team members for failing to conduct an audit of a listed company in accordance with audit standards.
The Australian Securities and Investments Commission (ASIC) has alleged that Grant Thornton Audit Pty Ltd (Grant Thornton) and former Grant Thornton director Bradley Taylor did not conduct the 2018 audit of iSignthis Ltd, which is now known as Southern Cross Payments Ltd, in accordance with legally back-auditing standards.
Both Taylor and the firm were charged with five contraventions of Section 307A(2) of the Corporations Act.
That section of the Corporations Act requires auditors to ensure that audits or reviews, which have a lower threshold of assurance, are conducted for the purposes of the Corporations Act.
“Grant Thornton was appointed as iSignthis’ statutory auditors for the 2018 financial year. Mr Taylor was a director of Grant Thornton at the time, and ASIC alleges that he was also responsible for the conduct of the audit,” a media release issued by the corporate regulator following an initial hearing at the Magistrate’s Court of the matter last Friday.
The matter will be heard again on December 1, 2022.
Financial penalties for breaching auditing requirements are different for an individual and a firm, with individuals copping $10,500 per offence if found guilty. Body corporates were hit with the $52,500.
There have only been two other matters that have been prosecuted by the regulator using the criminal provisions.
EC Audit Pty Ltd and Robert James Evett were convicted and fined for audit failures occurring during the audit of Halifax Investment Services Pty Ltd in August 2021. That company collapsed in November 2018.
Graham Rothesay Swan is the second case of an auditor that was convicted and fined for audit failures relating to an audit done in 2017 of a company called Big Un Limited.
This article was first published by The Mandarin.
Tom Ravlic is a journalist and author with a deep expertise in accounting, corporate governance and regulatory affairs. He has worked as an accounting academic, policy adviser for one of Australia’s three major accounting bodies, and consulted on the development of accounting curriculum for universities and professional associations.
