Whittle and Australian Securities and Investments Commission - [2018] AATA 1861

Whittle and Australian Securities and Investments Commission [2018] AATA 1861 (18 June 2018)
Division:TAXATION & COMMERCIAL DIVISION
File Number: 2017/5737
Re:Kathleen Whittle
APPLICANT

AndAustralian Securities and Investments Commission
RESPONDENT

DECISION
Tribunal:Mrs J C Kelly, Senior Member
Date:18 June 2018
Place:Sydney

The Tribunal affirms the decision made on 29 August 2017 by the Australian Securities and Investments Commission which confirmed the decision made on 5 July 2017 that Ms Whittle be disqualified under s 130F(2) of the Superannuation Industry (Supervision) Act 1993 from being an approved Self-Managed Superannuation Fund (SMSF) auditor with effect from 12 July 2017.
...............[sgd].........................................................
Mrs J C Kelly, Senior Member
CATCHWORDS
SUPERANNUATION – self-managed superannuation funds – approved SMSF auditor – Commissioner of Taxation referral to regulator – disqualification order issued by ASIC – failure to comply with auditor independence requirements – auditing of funds of immediate family and close family members – whether discretion should be exercised to disqualify applicant from being an approved SMSF or whether another decision should be made – decision affirmed
LEGISLATION
Superannuation Industry (Supervision) Act 1993 ss 128B, 128D, 128F, 128P, 130F
Superannuation Industry (Supervision) Amendment Regulation 2012 (No. 6)
Superannuation Industry (Supervision) Regulations 1994 reg 9A.06
Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Act 2012
CASES
Howarth and Australian Securities and Investments Commission [2008] AATA 278
McCormack and Australian Securities and Investments Commission [2016] AATA 1021
Re One.Tel Ltd (In liq); Australian Securities and Investments Commission v Rich [2003] NSWSC 186
Samuel and Australian Securities and Investments Commission [2016] AATA 696
Shi v Migration Agents Registration Authority (2008) 235 CLR 286
Yao v Minister for Immigration and Border Protection (2014) 140 ALD 21
SECONDARY MATERIALS
Accounting Professional and Ethical Standards Board Ltd, APES 110 Code of Ethics for Professional Accountants, paras 2, 290.100, 290.104, 290.105
REASONS FOR DECISION
Mrs J C Kelly, Senior Member
18 June 2018
DECISION UNDER REVIEW

Ms Whittle seeks the review of a decision made on 29 August 2017 by the Australian Securities and Investments Commission (ASIC) which confirmed the decision made on 5 July 2017 that Ms Whittle be disqualified under s 130F(2) of the Superannuation Industry (Supervision) Act 1993 (the SIS Act) from being an approved Self-Managed Superannuation Fund (SMSF) auditor with effect from 12 July 2017.
BACKGROUND
Ms Whittle has been an accountant since about 1975. She became a member of the Institute of Chartered Accountants in Australia in 1978, a registered tax agent in about June 1980, and a Fellow of the Institute of Chartered Accountants in Australia in 1993. She has been a company auditor since about 1980.
Ms Whittle has performed audits of SMSFs since about 1999 and was registered as an SMSF Auditor in 2013 pursuant to s 128B of the SIS Act.
For the 2006 to 2014 financial years, Ms Whittle was SMSF auditor for a fund of which her brother was the sole member (the brother’s fund).
For the 2009 to 2014 financial years, Ms Whittle was SMSF auditor for a fund of which her de facto partner was the sole member (the partner’s fund).
Until 5 July 2017, Ms Whittle audited numerous additional SMSFs.
Her auditing of the partner’s fund and the brother’s fund breached paragraphs 290.104 and 290.105 of the Compiled APES 110 Code of Ethics for Professional Accountants (APES 110), which is provided by the Accounting Professional and Ethical Standards Board Ltd.
Ms Whittle has acknowledged those breaches throughout the Australian Tax Office (ATO) compliance review and the referral to ASIC, discussed below.
In about April 2016, the ATO conducted a compliance review of audits of SMSFs undertaken by Ms Whittle for the financial year ending 30 June 2013, including the audits of the partner’s fund and the brother’s fund.
At a meeting on 7 April 2016 with two ATO officers, Ms Whittle gave an undertaking to the ATO to cease auditing the partner’s fund and the brother’s fund.
On or about 24 February 2017, ASIC received information about Ms Whittle from the ATO, pursuant to s 128P of the SIS Act (the Referral).
On 2 March 2017, ASIC sent Ms Whittle a “Show Cause” letter in relation to the Referral.
Ms Whittle responded in writing on 16 March 2017 and the primary disqualification decision was made on 5 July 2017.
THE REASONS FOR THE REVIEWABLE DECISION
The reviewable decision was made because Ms Whittle had breached the independence obligations in APES 110, paragraphs 290.104 and 290.105, in respect of the partner’s fund and the brother’s fund, thereby breaching s 128F(d) of the SIS Act.
THE REGULATORY REGIME
The regulatory regime pursuant to which the decision under review was made came into force in 2013.[1]
[1] Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Act 2012 and Superannuation Industry (Supervision) Amendment Regulation 2012 (No. 6)
Before her disqualification, Ms Whittle was an “approved SMSF auditor” as defined in s 10 of the SIS Act, that is, she was registered under s 128B of the Act, which provides:
(1)The Regulator must grant an application under section 128A and register the applicant as an approved SMSF auditor if:
(a)       the applicant:
(i)        has the qualifications prescribed by the regulations; and
(ii)has the practical experience prescribed by the regulations; and
(iii)has passed a competency examination in accordance with section 128C; and
(b)       the Regulator is satisfied that the applicant:
(i)is capable of performing the duties of an approved SMSF auditor; and
(ii)is unlikely to contravene the obligations of an approved SMSF auditor under Subdivision B; and
(iii)is otherwise a fit and proper person to be an approved SMSF auditor.
Discretion to register
(2)If the applicant does not meet one or more of the requirements of paragraph (1)(a), the Regulator may grant the application if the applicant meets the requirements of paragraph (1)(b).
Refusal to register
(3)If the applicant does not meet the requirements of paragraph (1)(b), the Regulator must refuse the application.
Section 128D provides:
(1)       The Regulator may, at any time, by giving written notice to a person:
(a)impose conditions, or additional conditions, on the person’s registration as an approved SMSF auditor; or
(b)       vary or revoke conditions imposed on the registration.
(2)       The Regulator may do so:
(a)       on its own initiative; or
(b)       on application by the person if:
(i)        the person is an approved SMSF auditor; and
(ii)the application is accompanied by any documents prescribed by the regulations.
(3)Without limiting the conditions that the Regulator may impose under this section, those conditions, or those conditions as varied, may require one or more of the following:
(a)that the person complete a course of education or training specified in the notice;
(b)that the person undertake and pass a competency examination within a period specified by the Regulator.
The SIS Act imposes professional obligations on approved SMSF auditors. Relevantly, s 128F(d) states that “an approved SMSF auditor must” “comply with the auditor independence requirements prescribed by the regulations” (emphasis added).
In summary, regulation 9A.06 of the Superannuation Industry (Supervision) Regulations 1994 (the SIS Regulation) provides that the auditor independence requirements are those set out in APES 110.
“Independence” is defined in paragraph 2 of APES 110 as:
(a) Independence of mind – the state of mind that permits the expression of a conclusion without being affected by influences that compromise professional judgement, thereby allowing an individual to act with integrity, and exercise objectivity and professional scepticism.
(b) Independence in appearance – the avoidance of facts and circumstances that are so significant that a reasonable and informed third party would be likely to conclude, weighing all the specific facts and circumstances, that a Firm’s, or a member of the Audit of Assurance Team’s, integrity, objectivity or professional scepticism has been compromised.
Section 290 of APES 110 is entitled “Independence – Audit and Review Engagements”. It comprises 514 paragraphs.
Paragraphs 290.4 to 290.12 appear under the heading “A Conceptual Framework Approach to Independence”. The definition of “Independence” set out in paragraph 2 of APES 110, is repeated at paragraph 290.6, after the words “Independence comprises”.
Paragraphs 290.100 and 290.101 appear under the heading “Application of the Conceptual Framework Approach to Independence”. Relevantly, paragraph 290.100 says:
Paragraphs 290.102 to 290.228 describe specific circumstances and relationships that create or may create threats to Independence. The paragraphs describe the potential threats and the types of safeguards that may be appropriate to eliminate the threats or reduce them to an Acceptable Level and identify certain situations where no safeguards could reduce the threats to an Acceptable Level. The paragraphs do not describe all of the circumstances and relationships that create or may create a threat to independence. …
Paragraphs 290.102 to 290.116 appear under the heading “Financial Interests”.
Paragraph 290.104 of APES 110 states that:
If a member of the Audit Team, a member of that individual’s Immediate Family, or a Firm has a Direct Financial Interest or a material Indirect Financial Interest in the Audit Client, the self-interest threat created would be so significant that no safeguards could reduce the threat to an Acceptable Level. Therefore, none of the following shall have a Direct Financial Interest or a material Indirect Financial Interest in the client: a member of the Audit Team; a member of that individual’s Immediate Family; or the Firm.
Paragraph 290.105 of APES 110 states that:
When a member of the Audit Team has a Close Family member who the Audit Team member knows has a Direct Financial Interest or a material Indirect Financial Interest in the Audit Client, a self-interest threat is created. The significance of the threat will depend on factors such as:
·The nature of the relationship between the member of the Audit Team and the Close Family member; and
·The materiality of the Financial Interest to the Close Family member.
The significance of the threat shall be evaluated and safeguards applied when necessary to eliminate the threat or reduce it to an Acceptable Level. Examples of such safeguards include:
·The Close Family member disposing, as soon as practicable, of all of the Financial Interest or disposing of a sufficient portion of an Indirect Financial Interest so that the remaining interest is no longer material;
·Having a Member review the work of the member of the Audit Team; or
·Removing the individual from the Audit Team.
Paragraph 2 of APES 110 defines “Immediate Family” to mean “a spouse (or equivalent) or dependent” and “Close Family” to mean “a parent, child or sibling who is not an Immediate Family member”.
Section 128P of the SIS Act relevantly provides that if the Commissioner of Taxation is of the opinion that a person has contravened the Act or the Regulations, the Commissioner may refer the details of the matter to ASIC.
Section 130F of the SIS Act provides for ASIC to order that an approved SMSF auditor be disqualified or his or her registration be suspended.
Section 130F(2)(a) relevantly states that:
The Regulator may make a written order disqualifying a person from being an approved SMSF auditor, or suspending a person’s registration as an approved SMSF auditor, if:
(a) the person has failed, whether within or outside Australia, to carry out or perform adequately and properly:
(i) the duties of an auditor under this Act or the regulations; or
(ii)any duties required by a law of the Commonwealth, a State or a Territory to be carried out or performed by an auditor; or
…
The requirement to comply with the auditor independence requirements prescribed by APES 110 has only been an express requirement of the SIS Act since 2013. Before the 2013 amendments, the main obligations of SMSF Auditors were set out in s 129 of the SIS Act.
However, it is not in dispute that Ms Whittle was subject to the auditor independence obligations in APES 110 for each year she audited the partner’s fund and the brother’s fund because she was a member of Chartered Accountants Australia and New Zealand (formerly Institute of Chartered Accountants Australia) and because of the auditing standards issued by the Auditing and Assurance Standards Board.
Ms Whittle did not dispute that she breached her auditor independence obligations for six years in relation to the partner’s fund and for nine years in relation to the brother’s fund, during the period 2006 to 2014.
THE ISSUES TO DETERMINED
The issue for the Tribunal to determine is whether it should exercise the discretion conferred by s 130F(2)(a)(i) of the SIS Act and affirm the decision to disqualify Ms Whittle from being an approved SMSF auditor pursuant to s 130F(2)(a)(i), or whether another decision should be made, such as imposing appropriate conditions on her registration under s 128D of the SIS Act.
PRELIMINARY MATTERS
At a directions hearing requested on 7 May 2018, two weeks before the hearing, and held on 10 May 2018, the respondent sought to rely on two further criticisms of Ms Whittle’s audits “in response” to the claim in her affidavit sworn 18 April 2018 that apart from the audits of her brother’s and her partner’s SMSFs, none of her SMSF audits “had been queried in any way”.
The two further criticisms were about her treatment of the valuation of the lease of the brother’s chambers and her audit of an SMSF for which her partner had prepared the financial statements. They were discussed in the ATO’s Position Paper prepared for the purpose of considering whether to refer the matter to ASIC pursuant to s 128P of the SIS Act which was sent to Ms Whittle under cover of a letter dated 20 January 2017 and then in a final form when the matter was referred to ASIC, which was sent to Ms Whittle on 24 February 2017.
In relation to those matters, the primary decision-maker wrote: “While I do not include it in the reasons for my decision, I remain concerned that Ms Whittle did not meet” the “auditor independence requirements of APES 110” in relation to her audit of the SMSF for which her partner prepared the financial statements and accounts, or the “requirements of relevant auditing and assurance standards in regards to SIS Act contraventions for” the brother’s fund.
The reviewable decision did not refer to either of those matters.
The respondent wished to rely on additional documents it had recently obtained from the ATO relating to those matters. The respondent had known of those matters since receiving the referral from the ATO in February 2017 and had decided not to rely on them. Allowing them to be raised would have altered the case Ms Whittle had been addressing since the primary decision was made in July 2017. The proceedings would have had to be adjourned to ensure procedural fairness. The Tribunal did not permit those matters to be pursued.
The Tribunal accepts that the ATO formed the opinions about those matters that it has expressed in the position papers, and to that extent does not accept Ms Whittle’s contention that her audits have not been “queried in any way” apart from the two breaches of independence in relation to the audits of her partner’s and brothers SMSFs. It confines its consideration to whether she should be disqualified from being an approved SMSF auditor because of her breaches of the independence requirements in relation to those two funds. It makes no findings about the other two matters about which the ATO had formed an opinion and which were not fully ventilated before it.
The applicant’s counsel criticised the respondent’s contention that a decision maker making a decision to disqualify under s 130F(2)(a)(i) is not “mandated by the SIS Act” to consider other matters in the SIS Act, such as the imposition of conditions on registration. The argument was unhelpful. Both parties accepted that the power to disqualify under s 130F(2)(a)(i) is discretionary, and that the Tribunal could impose conditions on Mr Whittle’s registration pursuant to s 128D of the SIS Act if it considered that was the correct or preferable decision.
The Tribunal is to determine for itself what the correct or preferable decision is.[2]
[2] Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at [100]; Yao v Minister for Immigration and Border Protection (2014) 140 ALD 21 at [41].
CONSIDERATION OF THE EVIDENCE
Ms Whittle’s conduct in breach of her auditor independence obligations was sustained over a period of nine years. She conceded that she was aware of the independence requirements before the 2013 legislation and at least since 2006 when she began to audit the brother’s fund. She told the Tribunal that her failure to comply with those obligations in relation to the partner’s and the brother’s funds was because she gave inadequate attention to the second limb of the definition of “independence”, “independence in appearance”. She strongly expressed her belief that she was independent of mind.
Ms Whittle had an “Audit strategy and plan” document for the SMSF audits she carried out for the partner’s fund and the brother’s fund for the 2013 financial year. The document included the following:
Independence
Consider and identify any independence or ethical issues in accepting this appointment
1.    Does the firm prepare the financial statements of the fund?
2.    Are the Trustees related to the fund Auditor?
3.    Is the Trustee a significant client of the firm?
4.    Does the firm provide investment advice to the Trustee?
5.    Is there any evidence that the Trustee has significant influence on the auditor of firm?
6.    Comments and conclusion (for any ‘yes’ answers).
She ticked “Yes” in answer to question 2 in respect of each fund.
In respect of the brother’s fund she commented:
The sole member is a very independently minded person who does not accept advice & operates the fund completely independently from me. As an officer of the Supreme Court he is a stickler for correctness.
When questioned about that comment, Ms Whittle said that she expressed it badly and that both she and her brother were very independently minded. When asked if she trusted what he said because he was an officer of the Court, Ms Whittle said that she did a robust audit of the fund in every respect. She did not agree that her independent judgment had been compromised.
In the Audit strategy and plan document for the partner’s fund, Ms Whittle commented:
The Trustee is independently minded & will not countenance advice from anyone especially me.
When it was suggested to Ms Whittle that she had recognised but ignored the independence issue in relation to the partner’s fund by ticking “Yes” to the question about being related to the fund’s trustee, Ms Whittle said that she was independent of mind and conceded that she had breached the independence of appearance requirement, and repeated that it was because she did not apply her mind to the second limb of the definition.
Ms Whittle said in respect of both funds, that she had an Audit strategy and plan document for each audit she carried out and would have ticked “Yes” to question 2. She said that she would probably have had the base document from about 1999. She maintained that she carried out proper audits in accordance with the SIS regulations, that is, the Tribunal understands, apart from the breach of the independence requirements.

Ms Whittle’s explanation for her breach of the independence requirements does not assist her, nor does her counsel’s description of her having drifted into error which she continued. She admitted that she had failed to apply her mind to the second limb of the definition of Independence. That definition is not the sole relevant consideration. There is detailed consideration of Independence in APES 110, as summarised above. Her explanation ignores the terms of paragraphs 290.104 and 290.105 which are clearly applicable to her auditing of the two funds, as she readily acknowledged during her first meeting with officers of the ATO on 7 April 2016.
Ms Whittle had cause to consider her Independence obligations:
·When she began auditing the brother’s fund in 2006;
·Each year she carried out the audit of that fund for nine years when she filled out the Audit strategy and plan document, as discussed above;
·When she began auditing the partner’s fund in 2009;
·Each year she carried out the audit of that fund for six years when she filled out the Audit strategy and plan document, as discussed above;
·In 2013 when the obligations were incorporated into the regulatory regime.
She clearly did not reflect upon her Independence obligations adequately or at all on any of those occasions. She carried out audits for nine years in apparent ignorance of paragraph 290.105 and for six years in apparent ignorance of paragraph 290.104. If she was aware of those provisions, she did not understand them or was blind to their application to her.
She could not explain why she began to audit either fund. When asked whether it was because she would have charged less than another auditor, she said “possibly”, and that she did not charge for the audits.
The comments Ms Whittle made in the Audit strategy and plan documents for both funds in 2013 about the independent mindedness of both trustees reflect a misunderstanding of the Independence obligations. They apply to her, not to the trustee. The Tribunal does not accept her evidence that the comment in respect of her brother was just badly expressed.
There was heated argument about an ATO record of client contact with Ms Whittle by telephone on 2 May 2016. Ms Whittle claimed some of the record was inaccurate. ASIC sought to rely on some of the comments recorded by Ms Whittle in that document to reinforce its case that disqualification was the correct and preferable decision.
The Tribunal accepts that Ms Whittle was very busy when that conversation took place because of deadlines for lodging tax returns on 15 May and 5 June, and was very stressed by receiving the call and being asked to provide documents. It infers that she was provoked by questions such as: “We still have the audit independence issue to correct, have you considered resigning as an approved auditor?” Ms Whittle had understood that her undertaking given on 7 April 2016 had dealt with that issue.
On its face, the document was prepared from interview notes and not from a recording. The interview notes are not before the Tribunal. The Tribunal has had the opportunity to make its own assessment of Ms Whittle. In the circumstances, the Tribunal does not consider that the conversations recorded in that document are of assistance. It prefers to rely on written responses from Ms Whittle to the ATO and to the respondent.
She provided no explanation for the breaches in her 2 February 2017 response to the ATO’s position paper or in her 16 March 2017 response to ASIC’s notification that her registration was being reviewed. In both those responses she expressed her deep disappointment that the ATO was willing to refer her to the respondent because she had understood that the ATO had told her that if she ceased auditing the partner’s and the brother’s SMSFs, the SMSF for which the partner had provided the financial statements and accounts, and other funds for which he had provided accounting services, no further action would be taken. She had given that undertaking and acted upon it.
She did address the question in her “Reasons relied on by the Applicant” provided in support of her request for internal reconsideration of the 5 July 2017 disqualification decision. She accepted that she “had made errors of judgment” in carrying out those audits.
The respondent emphasised two aspects of the ATO’s position paper. The first was the assertion that Ms Whittle did not believe that there was a need for strict independence and objectivity standards in a small practice including a requirement to separate the accounting services from the SMSF audit services she and her partner provided to clients. She has consistently refuted that assertion since her response to the ATO dated 2 February 2017.
The second was the ATO’s claim that she had contended that she audited the brother’s and partner’s SMSFs “for efficiency and convenience reasons”.
Ms Whittle did not address that claim in her February 2017 response to the ATO or in her March 2017 response to the respondent. She did not refer to that matter in the document supporting her July 2017 request for reconsideration. In her affidavit sworn 16 April 2018, Ms Whittle denied having given that reason.
Ms Whittle’s concession that she “possibly” did the audits because she charged less than another auditor, and in fact did not charge at all, is consistent with doing them “for efficiency and convenience reasons”. The Tribunal accepts that she did tell the ATO that was why she did the audits.
Mr Hooper gave evidence in support of Ms Whittle. He has practised as a sole proprietor CPA from 1970, as a chartered account from about 1984, and has held a practising certificate issued by the Chartered Accountants Australia and New Zealand (CA ANZ) since then. He is a registered tax agent. He was an SMSF auditor until 2013 when the legislation was amended. He has known Ms Whittle since the 1990s as a member of a small professional development discussion group.
From 2008-2009 until the 2015-2016 financial years, Ms Whittle audited the SMSF of which Mr Hooper and his brother were trustees.
Mr Hooper attested to Mr Whittle’s “exemplary credentials, depth of knowledge, competence and experience across the full spectrum of professional practice as an accountant including as an SMSF auditor”. He did not recall discussing independence requirements with the professional development discussion group.
He told the Tribunal that independence of mind and appearance was taught from the beginning of accountancy studies in auditing, although codified in recent times. He said that he did not audit an SMSF of anyone to whom he was related because independence was fundamental to auditing.
FINDINGS AND CONCLUSION
The requirement to comply with auditor independence requirements prescribed by APES 110 has only been an express requirement of the SIS Act since 2013 and therefore Ms Whittle has relevantly breached the SIS Act in the 2013 to 2015 financial year audits. However, it was conceded that Ms Whittle was subject to the APES 110 independence obligations and was aware of them, for each year she audited her brother’s and her partner’s SMSFs.
The Tribunal accepts the submission made by counsel for Ms Whittle that the predominant purpose of s 130F of the SIS Act is to protect the public, not to punish the auditor, although the latter may be the practical outcome.[3] That is consistent with the numerous authorities he cited.
[3] Howarth and Australian Securities and Investments Commission [2008] AATA 278 at [180].
Other cases do not assist the Tribunal to determine the appropriate decision in the particular circumstances of Ms Whittle’s case.[4]
[4] Re One.Tel Ltd (In liq); Australian Securities and Investments Commission v Rich [2003] NSWSC 186 per Bryson J.
The Tribunal accepts that there is a negligible risk that Ms Whittle would again breach the independence obligations she has breached in auditing the SMSFs of her partner and her brother. Her attention has been focussed on the relevant APES 110 provisions since March 2016. She now understands what those provisions require.
She acknowledged those breaches as soon as they were brought to her attention by giving the undertaking. She complied with that undertaking until the disqualification decision was made.
The Tribunal accepts that Ms Whittle regrets those breaches, given their consequences. However, it does not accept that she has demonstrated insight into her conduct because her explanations that she made an error of judgment or failed to give adequate attention to the “independence of appearance” requirement do not explain why she began to and continued to audit each SMSF in breach of paragraphs 290.104 and 209.105. The wording of those provisions, and the definitions of “immediate family” and “close family”, could not be clearer. As found above, she was unaware that the provisions existed, did not understand them, or ignored them. The Tribunal does not know which, although the evidence suggests that she was aware of those paragraphs but ignored them because she believed that she was independent of mind and would not be influenced by her relationship with either her brother or her partner, and it was efficient and convenient to do the audits.
Ms Whittle has acknowledged the need to protect the integrity, reliability, and confidence in the system of SMSF auditing and maintains that she would contribute to doing so.
The Tribunal accepts that she did not charge for the audits. It has taken into account that Ms Whittle will be deprived of one source of work and income if the disqualification decision is affirmed. She does carry out other accounting work from which she earns income.
Deterrence is a relevant consideration and may relate to the person concerned and to others engaged, or potentially engaged, in auditing SMSFs.[5] That the breaches continued over nine and six years in the face of clear provisions is a very serious matter. The Tribunal finds that deterrence of other existing or future SMSF auditors requires that in this case disqualification is appropriate. It does not accept that imposing the conditions proposed would be sufficient to address this consideration or would otherwise serve a useful purpose. Ms Whittle now understands the independence requirements.
[5] Howarth at [180].
The Tribunal does not accept that disqualification is more drastic than the circumstances require having regard to the ultimate purpose of s 130F(2)(a)(i). This case is unlike McCormack and Australian Securities and Investments Commission.[6] In this case, Ms Whittle was performing the precise duties of an SMSF auditor, carrying out audits of SMSFs.
[6] [2016] AATA 1021.
As Deputy President Deutsch said in Samuel and Australian Securities and Investments Commission:
The independence rules are a key and fundamental component of the Australian superannuation framework and cannot be disregarded.[7]
[7] [2016] AATA 696.
Ms Whittle did not dispute that statement.
For the above reasons, the Tribunal affirms the decision under review.
DECISION
The Tribunal affirms the decision made on 29 August 2017 by the Australian Securities and Investments Commission which confirmed the decision made on 5 July 2017 that Ms Whittle be disqualified under s 130F(2) of the Superannuation Industry (Supervision) Act 1993 from being an approved Self-Managed Superannuation Fund (SMSF) auditor with effect from 12 July 2017.

I certify that the preceding 82 (eighty-two) paragraphs are a true copy of the reasons for the decision herein of Mrs J C Kelly, Senior Member

...............[sgd].........................................................
Associate
Dated: 18 June 2018

Date(s) of hearing: 21-22 May 2018

Counsel for the Applicant: Mr A Gerard

Counsel for the Respondent: Ms S Palaniappan

Solicitors for the Respondent: Mr N Goodstone, Australian Securities and Investments Commission

Date(s) of hearing:	21-22 May 2018
Counsel for the Applicant:	Mr A Gerard
Counsel for the Respondent:	Ms S Palaniappan
Solicitors for the Respondent:	Mr N Goodstone, Australian Securities and Investments Commission