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ASIC has announced a five-year ban for one of the people connected to the $660 million collapse of Banksia Financial Group.
The regulator has accepted an enforceable undertaking from Warren John Sinnott, who was the lead auditor for the companies in the Banksia Group for the financial years 2009 to 2012.
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Mr Sinnott has been prevented from practising as a registered auditor until 2019.
Banksia entered receivership in August 2012 with debts of more than $660 million. It was revealed in April that creditors had since recouped an average of 80 cents in the dollar.
ASIC said its investigation had established that Mr Sinnott had “failed to carry out or perform adequately and properly the duties of an auditor”.
One of Mr Sinnott’s failings was that he didn’t perform sufficient audit procedures in relation to loan receivables, according to ASIC.
He also failed to remain alert that the risk of the potential impairment of loan receivables could have “cast doubt over Banksia Group's ability to continue as a going concern”.
ASIC commissioner John Price said auditors who failed in their duties would be held to account.
“Auditors are important gatekeepers who are relied upon to provide assurance and market confidence in the quality of financial reports,” he said.
ASIC's investigation into the collapse of Banksia is continuing.
[Related: ASIC bans broker for $9.4m fraud]
