A former member of Big Un Limited's audit team, Jakin Leong Loke, has had his company auditor registration suspended for 12 months by the Companies Auditors Disciplinary Board (CADB) following an application by ob体育.
Mr Loke was involved in the audit of the 2017 financial statements of Big Un Limited, which was then a public company listed on the ASX. He participated in the 2017 audit as a member of the Ecovis Clark Jacobs (ECJ) audit engagement team, working under the supervision of Graham Swan of Rothsay Resources and Rothsay Auditing, who were appointed by Big Un to perform the 2017 audit.聽
ECJ were engaged to manage the day-to-day audit activities despite one of the partners of ECJ being the company secretary of Big Un. The CADB found that Mr Loke should have been aware of this conflict of interest, which affected his and ECJ鈥檚 independence in managing the audit activities.
The CADB also found that Mr Loke failed to meet relevant audit benchmarks when he accepted accounting records at face value without obtaining additional evidence and signed off on audit papers without providing appropriate audit evidence. As a result, he failed to identify issues that were likely to impact Big Un鈥檚 ongoing viability.
In making its decision, the CADB said, 鈥楳r Loke鈥檚 failures are not insignificant, and the twelve month suspension of his registration as a company auditor reflects that.鈥�
Mr Loke provided an undertaking to ob体育 that he would complete an additional 45 hours of professional education. He also provided an undertaking that his first three company audits following the completion of his suspension would be subject to peer review by another registered company auditor.
The CADB acknowledged Mr Loke鈥檚 undertakings, as well as his cooperation with ob体育, including his agreement to pay $95,000 towards ob体育鈥檚 costs. The CADB considered these key reasons that a suspension was considered appropriate.
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Background
Big Un was placed in a trading halt and suspended from quotation in February 2018.聽 In August 2018, administrators were appointed to Big Un and it was removed from the official ASX list.
ob体育鈥檚 investigation into Big Un is ongoing.
ob体育鈥檚 increased focus on auditor misconduct has seen an increase in ob体育 referrals to the CADB seeking the suspension or cancelation of auditors鈥� registrations. In the last 18 months, ob体育 has lodged five conduct applications with the CADB relating to audit quality and auditor independence and referred 36 administrative matters to the CADB in relation to auditors who failed to complete annual statements over multiple years.
ob体育 has also referred five criminal briefs relating to auditor misconduct to the Commonwealth Director of Public Prosecutions. The conviction of former Halifax auditors Robert James Evett and EC Audit in 2021 was the first criminal conviction for failure to comply with audit standards (21-218MR).
CADB proceedings are confidential and final orders are not published until at least 14 days after orders are made. Recent orders and decisions can be found on the CADB鈥檚 website:聽
Editor鈥檚 note:
An earlier version of this media release referred to Mr Loke as a 'Big Un auditor'. Mr Loke was a member of Big Un's audit team. The headline and first paragraph of the media release has been updated to clarify this.