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“SMSF Auditor Failure to Qualify Opinion, leading to losses for Trustee’’

On 23 May 2018, the NSW Court of Appeal handed down a decision that the auditor of a self-managed super fund (SMSF caused the losses incurred by the trustee of the SMSF.

In the case Cam & Bear Pty Ltd v McGoldrick, the decision was held in the NSW Court of Appeal (NSWCA), that the Auditor of the SMSF had breached his duty of care to the trustees of the SMSF, in that negligence was displayed in the Auditors performance when issuing an unqualified audit opinion, albeit significant issues were present in the SMSF financial statements for the financial years 2003 to 2007.

This negligence ultimately resulted in the financial losses sustained by the plaintiff.

The decision by the NSW Court of Appeals resulted in a liability apportionment of 90/10 against the auditor. (See more details about the case here). The case findings provide a reminder to all audit practitioners about the requirements to comply with all relevant Australian Auditing Standards during the conduct of an audit, in particular; ASA 500 – Audit Evidence.

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