Perth-based registered company auditor David Makowa of DM Advisory Services has “undertaken to surrender his registration as a company auditor and to never re-apply”, according to ASIC.
The regulator has accepted a court-enforceable undertaking from Makowa, who audited the profit and loss statements and balance sheets of Brite Advisors and provided required opinions for the financial years ending 30 June 2019 to 2022.
ASIC added that Makowa admitted he failed to carry out or perform the audits adequately and in accordance with the Australian Auditing Standards and Standards on Assurance Engagements.
“Confidence and trust underpin the role of company auditors and the independent assurance they provide,” ASIC deputy chair Sarah Court said.
“This trust is critical to maintaining the integrity of our capital markets and enabling investors to make informed decisions. Auditor misconduct is an enforcement priority for ASIC and we will continue to investigate where we identify potential misconduct or non-compliance.”
Brite Advisors, which has been in liquidation since the Federal Court ordered it be wound up in February 2024, is among a spate of firms that have seen the regulator cancel their AFSL due to a Compensation Scheme of Last Resort (CSLR) payment.
On 30 September 2024, AFCA made a determination against Brite Advisors, which it failed to pay.
On 2 April 2025, the CSLR paid $21,888.20 to a person for the AFCA determination and notified ASIC. As a result, on 29 April 2025, ASIC cancelled Brite Advisors’ AFSL.
“Although Brite Advisors’ AFS licence is cancelled, this is on the condition, imposed by ASIC, that Brite Advisors must remain a member of AFCA for a period of 12 months, ending on 29 April 2026,” the regulator said.
“Where the CSLR pays compensation to an eligible consumer in relation to an AFCA determination and notifies ASIC of the details of the firm that failed to pay the compensation, ASIC must cancel the AFS licence or credit licence of the firm.
“The cancellation is not subject to discretion or merits review.”
While the determination of $21,888.20 against Brite Advisors is relatively minor, it could wind up being damaging for advisers.
“I don’t know what’s going to happen with that one. Brite Advisors is a really big, global firm, something in the order of US$740 million in client AUM,” FAAA chief executive Sarah Abood said in May.
“Some of that might be picked up by the securities subsector, we’re not sure at this stage, but certainly that’s one we’re keeping a close eye on.”
The regulator has previously explained that it launched the initial court action against Brite in 2023 because it was “concerned that the financial position of Brite, and the value of client funds under its management, were unknown”.
Based on evidence from the receivers, who at the time were acting in the capacity of investigative accountants, there was a discrepancy of around $100 million between the total amount of client funds that they could identify in the bank and trading accounts of Brite and the total amount of client funds on its books as “being reported to clients as being owed to them”.
Lets just add another $100Mill to Adviser CSLR Levies.
Given the AFSL Auditor didn’t do his job and has admitted guilt.
Should not the Auditors pay this Levy?
Likely not as they probably get away with murder like MIS and not included in CSLR.
This CSLR is a complete and utter shambles, growing more out of control each week.
Great job Jonesy.
Or was that your ALP / Industry Super Fund intention to wipe out Real Advisers ?