Halifax Auditor Charged and Fined for Audit Breaches by ASIC

​The Australian Securities and Investment Commission (ASIC) announced last week that on 17 August 2021, former auditors of online banking Halifax Investment Services Pty Ltd (Halifax), Mr Robert James Evett and EC Audit Pty Ltd (formerly Bentleys NSW Audit Pty Ltd, hereinafter as “EC Audit”) were convicted and sentenced to pay a fine of $10,000 and $40,000 respectively for failing to conduct audits in accordance with auditing standards.

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According to ASIC, Mr Evett and EC Audit are the first auditors in Australia to face criminal charges and to be sentenced under section 989CA of the Corporations Act. And both of them had previously pleaded guilty to the charges.

The charges relate to audits conducted by Mr Evett, as lead auditor, and EC Audit, as audit company, of the profit and loss statements and balance sheets of Halifax for three consecutive financial years ended 30 June 2016, 30 June 2017 and 30 June 2018.

The regulator detailed the breaches of the auditing standards as follows:

• EC Audit failed to understand Halifax’s business and failed to design appropriate tests to identify material misstatements in the accounts, and

• Mr Evett failed to take responsibility for the overall conduct of the audits and failed to ensure that staff with appropriate skills were conducting the audits.

“Auditors are important gatekeepers to the market and play a key role in ensuring financial reports are free from misstatements,” said ASIC Commissioner Cathie Armour.