ASIC Filed Criminal Charges against Halifax Auditors

The Australian Securities and Investments Commission (ASIC) filed criminal charged against EC Audit Pty Ltd (EC Audit), an authorised audit company previously known as Bentleys NSW Audit Pty Ltd, and its its director and registered auditor, Robert James Evett, for breaches of auditing standards in the Downing Centre Local Court, Sydney. EC Audit Pty Ltd used to be the auditor of troubled financial service provider, Halifax, whose AFSL was canceled by ASIC in January 2021.

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ASIC has mentioned three charges against both EC Audit and Mr Evett relating to audits of the profit and loss statements and balance sheets of Halifax for the financial years ended 30 June 2016, 30 June 2017 and 30 June 2018.

ASIC alleges, in breach of sections 989CA(1) and (2) of the Corporations Act (the Act) respectively, EC Audit failed to conduct each of the audits in accordance with auditing standards and Mr Evett, as the lead auditor, failed to ensure that each of the audits were conducted in accordance with auditing standards.  

The maximum penalty for the offences occurring before 1 July 2017 is a $9,000 fine for each charge against Mr Evett and a $45,000 fine for each charge against EC Audit. For the offences occurring on or after 1 July 2017, the maximum penalty is $10,500 for the charge against Mr Evett and $52,500 for the charge against EC Audit.

EC Audit and Mr Evett are the first auditors in Australia to face criminal prosecution for an alleged failure to comply with auditing standards.