Auditor’s attempt to shirk responsibility as engagement partner doesn’t hold up in court

A former auditor has lost all grounds of appeal in his application against the Companies Auditors Disciplinary Board (CADB) and Australian Securities and Investments Commission (ASIC) in the Federal Court of Australia following the cancellation of his auditor status after his involvement in an audit opinion that contravened particular Australian Auditing Standards.

Reginald Lance Williams became registered as a company auditor in 1996, before becoming the principal of Williams Partners Independent Audit Specialists (WPIAS).

In late 2012, Williams signed an unqualified audit opinion on behalf of WPIAS for the financial statements of an unregistered managed investment scheme known as the LM Managed Performance Fund for the financial year ending 30 June 2012.

The audit opinion asserted that the managed investment scheme’s financial statements were in accordance with the Corporations Act.

Williams was listed as the engagement partner for this audit opinion.

Finding that Williams had contravened the particular Australian Auditing Standards through how the audit was carried out, ASIC applied to CADB seeking disciplinary action in respect of the audit in early 2017.

“As the engagement partner he was responsible for the appropriate performance of the 2012 LM Audit in accordance with the relevant Auditing Standards, regardless of who at WPIAS may have performed the audit work the subject of ASIC’s allegations,” the board said.

A significant proportion of the work associated with the Audit had been performed by Andrea Blank, a registered company auditor employed by WPIAS, who allegedly recorded 51.6 per cent of the time as opposed to 18.9 per cent recorded by Williams.

“Mr Williams was responsible for the overall quality and sufficiency of the audit work performed and for the audit opinion that was issued,” the Board said.

Williams asserted that since Blank did most of the work on the audit, she was responsible for the failings of the audit opinion. The court disagreed.

“There was nothing in the terms of ASA 220 which supported the notion that, by delegating tasks within the audit to other persons, an Engagement Partner could be absolved of personal responsibility for the audit overall,” the primary judge said.

“Mr Williams ignored the central role that concepts of ‘responsibility’ play in the standards,” in his role as engagement partner, the court found.

“The Board concluded that, under the relevant Auditing Standards, Mr Williams bore responsibility for the overall quality and sufficiency of the Audit as Engagement Partner, notwithstanding that aspects of the Audit work had been undertaken by others,” the court found.

Upon consideration of the evidence, the Federal Court determined that Williams had established none of the grounds of appeal, dismissing his application, and determining for costs.

The case citation: Williams v Companies Auditors Disciplinary Board [2026] FCAFC 136.