The lead auditor for the Banksia Financial Group will be barred from practising for five years as part of the ongoing investigation into the group being conducted by the Australian Securities and Investments Commission (ASIC).
ASIC stated that it has accepted an enforceable undertaking (EU) from Warren John Sinnott of Kennington, Victoria who has been prevented from practising as a registered auditor until 11 June 2019.
During the 2009-2012 financial years Sinnott was the lead auditor for companies in the Banksia Group with an ASIC investigation finding he failed to carry out or perform adequately and properly the duties of an auditor
ASIC also stated he did not conduct the audits in accordance with the Australian Auditing Standards as required under the Corporations Act 2001 (Corporations Act).
Sinnott conducted audits for Securities Holdco Limited and its subsidiaries, Banksia Securities Limited and Cherry Fund Limited with ASIC claiming that at each audit he failed to "take responsibility for the overall quality of the audit and provide an appropriate level of supervision and review".
ASIC also claimed he failed to "perform sufficient audit procedures in relation to loan receivables and obtain sufficient appropriate audit evidence to reduce the risk of material misstatement of loan receivables to an acceptably low level".
As a result of this ASIC said Sinnott did not remain alert during the audits regarding the risk of the potential impairment of loan receivables casting doubt over Banksia Group's ability to continue as a going concern.
Under the conditions of the EU Sinnott will be required to undergo 10 hours of continuing professional development on audit methodology during each year of his suspension alongside other mandatory professional requirements.
He will also need to provide a copy of the EU whenever asked to perform an audit or review for which registration as an auditor under the Corporations Act is not required and submit his first three audits after the suspensions period to review by an ASIC approved registered auditor.
