I haven't bothered to look at the ASIC case against the auditors...

I haven't bothered to look at the ASIC case against the auditors too much, but yeah, a potential audit issue. It gets tricky though, and I'm hesitant to condemn the auditors, because it's not uncommon to do an audit, and the ideal documentation just doesn't exist. Certificates of practical completion are a template that is used occasionally, but they aren't a legal requirement.

Auditors will do revenue sampling, where they select specific revenues, and ask for documentation to prove the order, the work, the invoicing, and the payment. But I've had auditors say "prove that X has been paid by the customer" and the answer is "no, the customer hasn't paid us yet". Which is fine. I've been asked for remittance advices on invoices, and the answer is sometimes "that customer doesn't give us remittance advices, they just give us the money" - again, pretty normal. Where that happens, the auditor has to dig deeper and satisfy themselves that it's all legit. At the end of the day, if the business just says "sorry, we don't really have any documentation on that, the only documentation we have is this certificate of practical completion, which is prepped and dated, but the client never got around to signing it", then the auditor has to make a judgement call. As I said, certificates of practical completion aren't technically required. If the directors give you good access, but then lie about one or two things, it can be really tricky to catch it. Funnily enough, director representations can be permitted as proof (it's sorta a limited proof - if you have no other documentation, but a director signs a statement confirming X, that might be alright once or twice in an audit).

Now on this, the 3 integration contracts were hugely material, and it'd be hard for the auditor not to select them for sampling. But maybe they only sampled 1 of the 3 (unlikely, but maybe?)? Maybe they didn't consider that the jobs being incomplete were high risk. Maybe they focused more on payment, and got statements from the customers confirming that the amounts were due, and they were satisfied. I don't know. I'd need to see a whole bunch of documentation to know whether corners were cut or not. ASIC have examined that documentation and brought suit, so maybe. But I can't immediately state outright that the auditors did anything wrong.