The Australian Securities and Investments Commission (ASIC) has suspended auditor Joseph Santangelo, a partner at Nexia Australia, for two years over his audit work for Greensill Capital from 2018 to 2019. Greensill, a supply chain financing group, collapsed in March 2021.
Greensill's bankruptcy sparked political and financial scandals, as well as significant regulatory scrutiny of its auditors. ASIC's decision followed a review by the Companies Auditors Disciplinary Board (CADB), an independent tribunal that receives and reviews disciplinary applications from ASIC, which found that Santangelo "failed to carry out or perform adequately and properly the duties of an auditor."
Santangelo did not design or implement effective responses to address "significant risks of material misstatement of the group financial report," the CADB determined. He also failed to communicate these risks to other auditors and did not apply "sufficient professional scepticism" when reviewing their work. However, the CADB clarified that "there was no material misstatement in the relevant financial statements of the Greensill Group" nor evidence that Santangelo “engaged in any dishonesty or deliberate impropriety.”
"Auditors are a critical part of the governance framework and are in a unique position to identify and limit misconduct," Sarah Court, Deputy Chair of ASIC, said in a related press release. "The failure of auditors to meet the standards required of them can have serious consequences for investors and erode confidence in the integrity of Australia's capital markets."
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