ASIC accepts auditor registration cancellation

The Australian Securities and Investments Commission (ASIC) has announced that it has accepted the application of company auditor Benjamin Alfred Peters for the cancellation of his registration as a company auditor after raising concerns about his role as lead auditor and engagement partner in the audit of a large proprietary company.

The cancellation has come as part of ASIC’s 2025–26 audit surveillance program, where it reviewed an audit of L Audit, an authorised company, of which Peters is the sole director.

ASIC said it identified significant audit quality concerns in several areas, but did not specify or provide more details about the areas that caused concern.

It has also accepted L Audit’s application for the cancellation of its authorised audit company registration.

In its financial reporting and audit focus areas for the 2025–26 financial year, ASIC previously said it would continue to focus on areas where significant judgement from preparers of financial reports was required. These focus areas included revenue recognition, asset valuation, and estimation of provisions.

ASIC also said it would review an increased number of audit files, as well as a random selection of audit files from the regulated population.

ASIC commissioner Kate O’Rourke had urged auditors to self-identify and self-report non-compliance with their independence and conflicts of interest obligations through ASIC’s regulatory portal.

In the 2026–27 financial year, ASIC said its financial reporting surveillance capability would be bolstered, and it intends to review 25 audit files to focus on listed and unlisted companies, alongside a selection of management information systems.

The audit files will be selected where there has been a “material correction” to a financial report, or where ASIC is concerned that a financial report may be substantially misstated, based on other internal and external data (including independence threats), which point to a risk to audit quality, ASIC said.

In her keynote address at the G100 – CPA Australia Annual Reporting Luncheon, ASIC chair Sarah Court said ASIC will soon publish two reports. One will document the findings of ASIC’s annual financial reporting and audit review of companies, while another will contain the findings of its review of financial reporting and audit in the superannuation sector.

She added that going forward, ASIC is also going to be looking at the financial reports and audits of some managed investment schemes.

“Managed investment schemes are an increasing part of what ASIC is looking at, at present, because in particular of the potential for investor harm. And we’re also seeing increasing numbers of investors accessing private credit through managed investment schemes,” Court said.

“We are particularly interested in the quality of the schemes’ financial reporting, especially their valuations. We’re also interested in the auditors’ processes in relation to valuations.”

Court also touched on the regulation of accounting, auditing, and consulting firms, and said ASIC started a broad industry surveillance of the big four audit firms and the issues raised in internal complaints, including by whistleblowers, after the alleged audit misconduct matters at KPMG came to light.

Court said the regulatory framework within which ASIC operates is “inadequate” for regulating large multi-disciplinary firms like KPMG, as the regulatory framework under which ASIC operates focuses on individual auditors and engagements.

“And in our view – and we’ve said this publicly – we think this is inadequate for regulating the large multi-disciplinary firms that play such a critical role in Australian markets,” Court said.

“What all of that means is that many of the poor practices that are alleged and that we’ve been reading about currently fall outside our regulatory remit.”

She noted that ASIC has commenced multiple lines of inquiry and formal investigations into the alleged audit misconduct at KPMG.