Greensill auditor suspended for 2 years by | Market wire

Unlock the Editor’s Digest without cost

Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.

Australia’s markets regulator has suspended a Sydney-based auditor for 2 years over his “failure” in auditing the financial statements of Greensill Capital and its subsidiaries.

The suspension is the latest fallout from the collapse of Greensill, the availability chain financing group enmeshed in a political and financial scandal. The position auditors performed within the March 2021 chapter has been the subject of vital regulatory scrutiny.

The Australian Securities and Investments Fee mentioned on Friday that Joseph Santangelo, a associate at Nexia Australia, had been suspended till June 2026 and must pay A$375,000 ($239,000) to cowl the regulator’s prices. Nexia Worldwide is a international community of more than 250 corporations.

Santangelo “failed to carry out or perform adequately and properly the duties of an auditor” in conducting the audits of Greensill and its subsidiaries, mentioned the Corporations Auditors Disciplinary Board (CADB), an impartial tribunal.

The board had reviewed Santangelo’s work on Greensill’s accounts for the years ending in December 2018 and December 2019.

The UK accounting regulator opened an investigation into Saffery Champness — a firm which can be half of the Nexia community — in 2021 over its Greensill Capital work however has but to report its findings.

The regulator additionally opened a probe into PwC’s audit of Wyelands Financial institution, which is owned by Sanjeev Gupta, the metal magnate that was one of Greensill’s greatest clients. King & King, the small audit firm that signed off the accounts of many of Gupta’s different corporations, can be being investigated within the UK.

In 2023, the Australian regulator requested the CADB to contemplate whether or not Santangelo’s work on accounts filed by Greensill had been performed in accordance with Australian auditing requirements.

Santangelo was the lead auditor and engagement associate on the consolidated accounts, which comprised about 40 entities together with Greensill Capital and Greensill Financial institution.

The board mentioned Santangelo had did not design and implement responses to deal with “significant risks of material misstatement of the group financial report” and had additionally failed to speak such dangers to different auditors. The board mentioned he additionally “failed to apply sufficient professional scepticism” when evaluating the work of different auditors.

Nonetheless, the board “did not contend that there was any material misstatement in the relevant financial statements of the Greensill Group or that Mr Santangelo engaged in any dishonesty or deliberate impropriety”. 

Santangelo co-operated with the investigation and accepted its findings, mentioned the regulator.

He didn’t reply to a request for remark.

Andrew Hoffman, Nexia Sydney’s managing associate, mentioned it accepted the findings of the ASIC. 

“We engaged an external expert to review our quality control processes and audit engagements with a focus on the matters identified by CADB. We have implemented the recommendations from these reviews and remain focused on delivering high-quality audit engagements,” he mentioned in a assertion.

The ASIC mentioned in a assertion that “auditor misconduct” would stay an enforcement precedence for the regulator in 2025.

“Auditors are a critical part of the governance framework and are in a unique position to identify and limit misconduct,” mentioned the ASIC deputy chair Sarah Court docket. “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.”