Grant Thornton charged with audit failure of iSignthis

September 1, 2022

The accounting firm faces five charges under the Corporations Act and more than $250,000 in fines.

Grant Thornton and one of its former directors have been charged for failing to conduct an audit of an ASX-listed company and face total fines of more than $300,000.

The firm along with Bradley Taylor appeared before Melbourne Magistrates’ Court accused of failing to conduct the 2018 audit of iSignthis Ltd in accordance with the Australian auditing standards.

A Grant Thornton spokesperson said that the firm would be addressing the charges.

“Grant Thornton takes any alleged breach of auditing standards very seriously,” they said.

“The matter before the court — carried out under a relatively new application of the law — alleges that auditing standards were not correctly applied in the FY2018 audit of iSignthis, without any further implication of impropriety.

“Both Grant Thornton Audit and Mr Brad Taylor will be defending these matters.”

Grant Thornton was appointed as iSignthis statutory auditors for the 2018 financial year when Mr Taylor was a director of Grant Thornton, which ASIC alleges was responsible for the conduct of the audit.

The firm was charged with five contraventions of section 307A(1) of the Corporations Act 2001: “If an individual auditor, or an audit company, conducts: an audit or review of the financial report for a financial year; or an audit or review of the financial report for a half-year; the individual auditor or audit company must conduct the audit or review in accordance with the auditing standards.”

Mr Taylor was also charged with five contraventions but of section 307A(2) from the same act: “If an audit firm, or an audit company, conducts: an audit or review of the financial report for a financial year; or an audit or review of the financial report for a half-year; the lead auditor for the audit or review must ensure that the audit or review is conducted in accordance with auditing standards.”

The maximum penalty for each s307A offence at the relevant times was $10,500 for individuals and $52,500 for body corporates.

This was only the third time that ASIC had brought criminal charges arising from the failure to comply with auditing standards.

The charges were adjourned to 1 December 2022.

[Accountants Daily]