Auditor cancels ASIC registration following conflict of interest concerns

Last Friday (24 April), corporate watchdog ASIC accepted Douglas Trood’s application to cancel his registration as a company auditor after the regulator raised concerns about his adherence to the APES 110 Code of Ethics for Professional Accountants (including Independence Standards).

ASIC’s central concerns related to Trood’s involvement in the audit of a large company, as lead auditor and engagement partner, while maintaining a long association with the client over 34 years.

He had also concurrently held various positions as non-executive director (from 1991 to 2004), secretary (from 1989 to 2004) and non-beneficial shareholder (from 1990 to 2016) with the audit client.

“ASIC was concerned that these matters created significant self-interest and familiarity threats to auditor independence that were not appropriately addressed,” the regulator said in a statement.

The regulator said it had identified alleged independence failures through its proactive surveillance of auditor independence and conflicts of interest.

ASIC previously declared auditor misconduct one of its top enforcement priorities for 2026.

“Auditor independence is fundamental to trust in Australia’s financial reporting system. Auditors must avoid situations where their objectivity is compromised, or could reasonably be seen to be compromised,” commissioner Kate O’Rourke said.

ASIC noted that Trood made no admissions to ASIC regarding his auditor independence.