An auditor in an Australian chartered accountants firm has been suspended for twelve months after ignoring important audit standards, the corporate watchdog said.
The Australian Securities and Investments Commission (ASIC) said BDO partner Ralph David Goodman was suspended following a review he conducted of The Satellite Group Ltd financial report for the half-year ending 31 December 1999.
His suspension follows an application in the Federal Court by ASIC.
ASIC said The Companies Auditors and Liquidators Disciplinary Board (CALDB) found Mr Goodman's opinion was based on inadequate review work in relation to the fair valuation of assets acquired, goodwill accounting and the solvency of Satellite.
It found there had been a very serious neglect of fundamentally important audit standards by an auditor who knew what the standards required, ASIC said.
Mr Goodman was required to give an undertaking not to sign requisite reports unless and until he had received and supplied ASIC with a copy of a written statement from the national BDO partner in charge of audit, that the work complied with acceptable standard.
These will be in place after his one year suspension, for each of the first four times he is engaged to review the half year financial report of a public company and for each of the first two times, either or both of which may be within these four matters.
ASIC said Mr Goodman had previously challenged the CALDB's jurisdiction to consider the corporate watchdog's application, on the basis that in conducting a review, an auditor is not performing the duties of an auditor.
His claim was rejected and Mr Goodman was ordered to pay ASIC's costs, ASIC said.
Deputy executive director of enforcement Mark Steward said auditors were expected to conduct half-yearly reviews as required by the Corporations Act in accordance with the Australian Auditing Standards.
“ASIC will continue to take action against auditors who fail to comply with their obligations, including obligations to carry out proper half-yearly reviews,” Mr Steward said.