Questions raised on Shield, First Guardian audits | Australian Markets

Attention across the collapse of the Shield and First Guardian Funds has turned to the position of auditors in circumstances the place audit experiences didn’t level to issues concerning the schemes till mid 2024.

Financial Newswire has sighted a compliance plan audit report for the Shield Master Trust filed with the Australian Securities and Investments Commission (ASIC) in July, 2024, protecting the financial yr ending 30 June, 2023, for an audit undertaken by respected firm, BDO.

It was in that report that BDO stated that the administrators of Keystone Asset Management because the Responsible Entity (RE) for the Shield Master Fund had not supplied BDO “with access to information that we require to form our opinion, including but limited to all books and records of the Company including related party transactions/balances, legal advice and corporate documentation”.

“The Responsible Entity have not met the requirements of their compliance plan in numerous instances during the year ended 30 June 2023, including, the financial reporting and lodgement obligations of itself as Responsible Entity or the Scheme it manages for the year ended 30 June 2023 (and half years ended 31 December 2022 and 2023 for the scheme),” the BDO audit report stated.

“Various Financial Requirements for Cash Sufficiency throughout the year ended 30 June 2023 including that calculations were not approved by the Directors for the December 2022 quarter, all quarters the cash needs calculations were not prepared on 12-month forecast, did not include the stated assumptions underlying the forecasts as required,” it stated.

Louis Christopher, whose analysis and rankings firm, SQM Research, has been subjected to criticism over its score of the Shield Fund stated auditors are key gatekeepers and the accuracy and timeliness of their experiences are a elementary half of making a rankings evaluation.

He identified that the BDO report in query had in actual fact solely grow to be accessible after SQM Research had really downgraded the Shield Fund based mostly on its own inquiries.

Christopher restated an assertion that he made alongside Morningstar’s Manager, Research and Ratings, Matt Olsen, during Financial Newswire’s Advice Wealth and Super Conference in March that rankings homes usually are not auditors.

Examination of the audit of the First Guardian Master Fund through its Responsible Entity Falcon Capital has additionally given rise to questions being requested of ASIC concerning the standing of its scheme auditor, Audit Services Plus.

The question pertains to ASIC’s own data exhibiting that the firm was deregistered efficient from 13 June, 2022 beneath Section 601AA regarding voluntary deregistration.

ASIC knowledge exhibits, nonetheless, that audit experiences for First Guardian continued to filed up to the center of October, final yr.