Grant Thornton auditor admonished, ordered to pay $490k

The Companies Auditors Disciplinary Board (CADB) has handed down its decision to admonish Grant Thornton partner Simon Trivett for failing to carry out or perform adequately and properly the duties of a review auditor.

The decision, handed down on 30 June, was made in relation to the audit of the financial statement of iSignthis Ltd for the financial year ended 30 June 2018 (FY18 audit).

The most recent decision followed an extensive investigation when ASIC first commenced its application in the CADB against Trivett on 5 February 2021.

Between 6-9 December 2022, a four-day hearing occurred before the CADB panel in Melbourne, with the panel upholding ASIC’s application which was handed down on 7 September 2023.

At the hearing, Trivett accepted that he had failed in the performance of his duties and was ordered to provide to ASIC various undertakings and that he pay ASIC’s fixed costs of the application of $490,000.

According to ASIC, the substantial delay in the announcement of proceedings was caused by Trivett challenging the validity of the panel’s decision on 6 October 2023, which were later dismissed on 22 April 2024.

Before the decision to admonish Trivett, the CADB noted it had to take into account that Trivett agreed to not perform the duties of a registered company auditor in the period between 1 November 2023 to 31 October 2024 in the Federal Court of Australia on 26 October 2023.

In addition to the decision, the CADB required Trivett to provide undertakings to ASIC in relation to engaging a peer reviewer for his audits and undertaking extra CPD.

Sarah Court, deputy chair of ASIC, said the corporate regulator regularly reviews registers, supervises and reviews the conduct of company auditors as they were the trusted “gatekeepers” required to use their professional competence, skills and capabilities to provide assurance and confidence.

“This is an important decision. It is the first time that the CADB has determined the role of review auditors and engagement quality control reviewers in the conduct of an audit,” Court said.

“Review auditors and engagement quality control reviewers play an important part in reviewing auditor conduct and significant judgements made by audit engagement teams in company audits.”

In terms of the audit of FY18, it was found that Trivett had failed to:

· Discuss the performance shares with the engagement partner as part of his evaluation of the significant judgments made by the audit engagement team and the conclusions reached in formulating the auditor’s report.

· Review the specified documentation in the FY18 audit file in relation to the significant judgements that the audit engagement team made the conclusions it reached.

· Perform a review of the FY18 financial report before it was issued and failed to adequately perform procedures required by Grant Thornton’s policies on engagement quality control review.

· Perform an evaluation of whether the proposed FY18 audit report was appropriate.