oops...auditor overlooked role

Overlooked ASIC Requirement

http://www.asic.gov.au/asic/asic.nsf/byHeadline/12-75MR%20ASIC%20accepts%20enforceable%20undertaking%20from%20auditor%20for%20breaching%20the%20rotation%20requirements?opendocument

12-75MR ASIC accepts enforceable undertaking from auditor for breaching the rotation requirements

Friday 20 April 2012


ASIC has accepted an enforceable undertaking (EU) from Sydney-based auditor Graham Bruce Abbott after he breached auditor rotation requirements.

Auditor rotation requirements in the Corporations Act stipulate that an auditor can’t audit a listed company for 5 successive years without a 2 year break.

Auditor rotation is a key aspect of the independence provisions aimed at enhancing the reliability and credibility of financial reports.

ASIC’s surveillance found that Mr Abbott breached the rotation requirements of the Corporations Act by playing a significant role in audits of listed companies Central West Gold NL and Morning Star Gold NL each for a number of successive financial years.

ASIC was concerned that Mr Abbott showed a lack of understanding of the importance of his obligations as an auditor by breaching the rotation requirements.

Under the EU, Mr Abbott has agreed to not practice as an auditor for a company or a registered scheme under the Corporations Act.


Background


Section 324DA(1) of the Corporations Act states if an individual plays a significant role in an audit of a listed company or listed registered scheme for five (5) successive financial years, the individual is not eligible to continue to play a significant role unless they have not played such a role for at least two (2) successive intervening years.

Download the enforceable undertaking