Samuel and Australian Securities and Investments Commission

This matter concerned an appeal to the Administrative Appeals Tribunal by Mr Samuel, an approved self-managed superannuation fund (SMSF) auditor, against a disqualification order made by the Australian Securities and Investments Commission (ASIC). The Commissioner of Taxation had referred Mr Samuel to ASIC, opining that he had failed to adequately and properly perform his duties as an approved SMSF auditor and was not a fit and proper person to hold that registration. The referral was based on findings that Mr Samuel had not obtained sufficient appropriate audit evidence, had failed to maintain auditor independence, and demonstrated a fundamental misunderstanding of SMSF structures and independence requirements.

The Tribunal was required to determine whether Mr Samuel had complied with the standards expected of an approved SMSF auditor, particularly concerning auditor independence as prescribed by regulations, and whether his conduct amounted to a failure to perform his duties adequately or properly, rendering him not a fit and proper person to be an approved auditor. The specific audits under scrutiny related to the Kras Engineering Pty Ltd Superannuation Fund, the Cindy Samuel Superannuation Fund, and the Choice Business Management Pty Ltd Superannuation Fund for the year ended 30 June 2012.

Professor R Deutsch, Deputy President, affirmed ASIC's decision. The Tribunal found that in relation to the Kras Engineering SMSF, Mr Samuel acted as both tax agent and auditor. For the Cindy Samuel SMSF, he was the tax agent, auditor, held an enduring power of attorney for the sole member, and was her guardian. In the Choice Business SMSF, he was the tax agent, auditor, and sole director of the corporate trustee, as well as the sole member. These circumstances, particularly the dual roles and personal connections, raised significant concerns about his independence. The Tribunal concluded that Mr Samuel's responses indicated a lack of capability or willingness to understand the critical issues of independence and the basic requirements for SMSF audits, supporting the Commissioner's view that he had not performed his duties adequately or properly.

Consequently, the Tribunal affirmed the decision to disqualify Mr Samuel from being an approved SMSF auditor from 14 October 2015. The Tribunal noted that any future eligibility to act as an approved SMSF auditor would require Mr Samuel to satisfy ASIC of his understanding of the seriousness of his past conduct and provide assurance that such conduct would not be repeated.