The auditor of failed broking firm Halifax, EC Audit has pleaded guilty to criminal charges for alleged auditing breaches.
The criminal charges
According to the Australian Securities and Investments Commission (ASIC), the firm pled guilty in Downing Crown Court, Sydney, to three charges relating to alleged failure to conduct audits in accordance with auditing standards while director Robert James Evett also pled guilty to three charges on ensuring the audits were conducted correctly.
The charges related to the audits of profit and loss statements and balance sheets of Halifax Investment Services Pty for the financial years ending June 30, 2016, 2017, and 2018.
Halifax Investment Services, which went bankrupt on November 25, 2018, was a financial services provider headquartered in Sydney with a partially-owned subsidiary in Auckland, New Zealand. In March 2019, the company entered liquidation and had its AFS license canceled later in January 2021.
“Auditors play a key role in providing confidence in the quality of financial reports. Auditors must comply with all applicable auditing standards and obtain reasonable assurance that a financial report is free of material misstatement,” the ASIC said.
The maximum penalties for the offenses occurring before July 1, 2017, were a $9,000 fine for each charge against Evett and a $45,000 fine for each charge against EC Audit.
For those occurring after July 1, 2017, the penalty rose to $10,500 for Evett and $52,500 for the firm.
The matter was adjourned for sentencing on August 10, 2021, while ASIC’s investigation continued.
Think we missed something? Let us know in the comment section below.