ASIC Sues Auditeo and Two Auditors Over Alleged First Guardian Audit Failures | LeapRate
Australia’s corporate regulator said Friday that it has launched Federal Court proceedings against Auditeo Australia Pty Ltd and two auditors over alleged serious audit failures linked to the collapse of the First Guardian Master Fund.
The Australian Securities and Investments Commission alleges that unqualified audit reports on First Guardian and its compliance plan for the 2020 to 2024 financial years were false or misleading, in breach of the Corporations Act.
The reports were said to have been signed by lead auditor Ajm Didarul Islam Khan or, for certain compliance plan audits, Brian Robert Taylor.
“We allege audit opinions were issued despite there being no reasonable basis for those opinions and despite significant audit work required under auditing standards not being performed,” said ASIC Chair Sarah Court. “The alleged failures in this matter occurred before the collapse of the First Guardian Master Fund, with a devastating impact on investors.”
She said liquidators were appointed just six months after Auditeo issued the unqualified reports, with more than 6,000 Australians exposed to the collapse and losses that liquidators warned could reach $446 million.
ASIC alleges that in the 2022 financial year about $137 million of reported assets went entirely untested, rising to roughly $170 million in 2023.
It also claims Auditeo’s files do not demonstrate that any financial audit was conducted for the 2021 year, despite a report being issued.
The regulator is seeking declarations of contravention, financial penalties, injunctions and orders restraining the defendants from certain audit activities.
