Nexia Perth Audit Services Pty Ltd (Nexia Perth Audit), an authorised audit company, has paid $78,250 to comply with an infringement notice issued by ASIC.
The infringement notice was issued because ASIC has reasonable grounds to believe that Nexia Perth Audit failed to conduct the audit of a listed company in accordance with APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (APES 110). Auditing standards state that auditors must follow the applicable requirements of APES 110.
ASIC alleges that a network firm of Nexia Perth Audit provided tax calculation services involving the preparation of current and deferred tax liabilities and assets for the listed company, an audit client of Nexia Perth Audit. The relevant non-assurance fees were estimated to be $4,500. The tax calculation services provided are prohibited under APES 110, because they can create a self-review threat to auditor independence.
ASIC identified these issues through a proactive surveillance focused on auditors' compliance with independence and conflict of interest requirements (see 24-240MR). ASIC will soon publish its findings from this review and expects to announce further action as a result of issues identified through this surveillance.
ASIC Commissioner Kate O'Rourke said, 'Auditor independence is fundamental to maintaining trust in and integrity of audits. The potential threats to auditor independence where an audit firm also provides non-audit services to an audit client have been the subject of much public debate in recent years. Some non-audit services are prohibited because of the inherent threat they pose. Where ASIC identifies such conduct, we will take action.'
Payment of an infringement notice is not an admission of guilt or liability.
The specific reasons for ASIC's concerns are set out in the infringement notice on the Infringement Notices Register.
