On Thursday, it was confirmed by the Companies Auditors Disciplinary Board (CADB) that Robert Evett, of EC Audit, who audited Halifax Investment Services between 2016–2018, was “not a fit and proper person to remain registered as an auditor and that, in acting as the lead auditor on the Halifax audits, he failed to adequately perform the duties and functions required of him”.
“Mr Evett’s conduct was not the result of what might be described as a momentary lapse or isolated incident,” CADB said in a statement.
“Rather it was attributable in our view to a serious neglect on his part to perform his duties, especially the significant responsibilities of Engagement Partner, Lead Auditor and the Lead Assurance Practitioner in the three Halifax audits, with very serious consequences.”
CADB claims that had Mr Evett performed his duties as required, errors in Halifax’s 2017 financial statements would have been identified.
Halifax’s license was cancelled by ASIC in January.
Mr Evett did not contest the CADB’s decision.
It comes after Mr Evett and EC Audit were sentenced to pay fines of $10,000 and $40,000, respectively, last month for failing to conduct audits in accordance with auditing standards.
EC Audit was found to have failed to understand Halifax’s business and failed to design appropriate tests to identify material misstatements in the accounts and Mr Evett failed “to take responsibility for the overall conduct of the audits and failed to ensure that staff with appropriate skills were conducting the audits”.
“Auditors are important gatekeepers to the market and play a key role in ensuring financial reports are free from misstatements,” ASIC commissioner Cathie Armour said in August.
“In taking this action against EC Audit, ASIC is sending a message to auditors to maintain a strong culture focused on audit quality and that any serious failure to comply with auditing standards will be prosecuted.”
