FMA issues warning to former FMC auditor

Media Release
MR No. 2025 – 01

The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – has issued a public warning to Mr Allan Facey, a Sydney-based auditor, regarding his conduct as the Engagement Quality Control Reviewer (EQR) for the audit of Alliant Perpetual.

The FMA is satisfied that Mr Facey did not comply with two standard conditions of his New Zealand auditor’s licence, which was issued by the FMA under the Auditor Regulation Act 2011 pursuant to the Trans-Tasman Mutual Recognition Act 1997.

The decision stems from the audit of former FMC reporting entity Alliant Perpetual’s financial statements for the year ended 31 January 2022 (the audit). Mr Sam Danieli, a Sydney based auditor, conducted the audit and Mr Facey was the EQR.

The FMA is satisfied there was insufficient evidence to demonstrate that, at the time the auditor’s report was dated, Mr Facey had performed an objective evaluation of the significant judgements made by the engagement team and the conclusions reached in formulating the auditor’s report. Audit work recorded by Mr Facey five months after the auditor’s report was dated did not assist in establishing compliance with auditing and assurance standards.

Mr Facey also failed to promptly notify the FMA after he became aware that an FMC audit engagement he worked on or reviewed had not been carried out in accordance with auditing and assurance standards. It would have been clear to Mr Facey when he received the dated auditor’s report his Engagement Quality Control Review had not been completed and the requirements of ISA (NZ) 220 had not been met. He was also aware that insufficient audit work had been done by Mr Danieli in respect of the audit.

FMA Head of Auditing, Financial Reporting, and Climate Related Disclosures, Jacco Moison, said: “The EQR role is important because it should ensure that an objective evaluation of the significant judgements made by the engagement team has been performed and the conclusions on these judgements are supported by sufficient audit evidence. Licensed auditors must promptly notify the FMA after they become aware that an audit engagement they have worked on or reviewed has not been carried out according to the auditing and assurance standards. Remaining silent harms the transparency of the market and the integrity of the auditing profession.”

ENDS

Notes

• The FMA cancelled Mr Facey’s licence at his request prior to the FMA’s decision to issue the warning.
• Alliant Perpetual was a registered building society that was struck off the register in September 2023.
• The FMA cancelled Mr Danieli’s licence for multiple failures relating to the audit and ordered that he not reapply for an audit licence for FMC audits in New Zealand for three years.

Related media release

FMA cancels auditor’s licence to carry out FMC audits for multiple failures 

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