EC Audit, the auditors for Halifax Investment Services, will be the first to face criminal charges in Australia for failure to comply with auditing standards.
The Australian Securities and Investments Commission (ASIC) brought three charges against EC Audit and its director, Robert Evett, relating to audits of the profit and loss statements and balance sheets of Halifax for the 2015-16, 2016-17 and 2017-18 financial years.
ASIC alleged, in breach of sections 989CA(1) and (2) of the Corporations Act, EC Audit failed to conduct each of the audits in accordance with auditing standards and Evett, as lead auditor, failed to ensure that each of the audits were conducted in accordance with auditing standards.
The maximum penalty for the offences that occurred before 1 July, 2017, was a $9,000 fine for each charge against Evett and a $45,000 fine for each charge against EC Audit.
For the offences that occurred on or after 1 July, 2017, the maximum penalty was $10,500 for the charge against Evett and $52,500 for the charge against EC Audit.
Halifax was an Australian financial services licensee (AFSL) provider that was placed in administration in November 2018 and entered liquidation in March 2019. ASIC cancelled Halifax’s AFSL in January 2021.
The charges against EC Audit and Evett followed an ASIC investigation into Halifax which commenced in 2019 and continued.
The charges against both EC Audit and Evett were adjourned to 6 July, 2021, with the Commonwealth Director of Public Prosecutions prosecuting the matter.