A Canberra company auditor will cancel his registration after an investigation by the watchdog found the man failed to meet ethical standards.
The accounting firm the auditor was a partner in also failed to ensure its auditors meet the ethics requirements.
The Australian Securities and Investments Commission said it had accepted a court enforceable undertaking from the auditor Robert Johnson and the accounting firm Hardwickes.
Mr Johnson will cancel his registration as a company auditor and not reapply, while Hardwickes agreed to engage an external expert to review its auditing practices and present a remedial action plan the commission.
The commission said Mr Johnson had admitted, following an investigation, he had failed to ensure his audits of Consolidated Builders Limited were conducted in accordance with the accounting code of ethics.
Mr Johnson had audited Consolidated Builders for 32 years, the commission said.
The former company auditor failed to ensure the audit of Consolidated Builders met ethical standards, provide an accurate declaration of auditor independence or ensure the accuracy of the company's 2023 financial statement.
"The long association created a familiarity threat to his independence. Hardwickes also provided various non-auditing services to Consolidated Builders which further undermined Mr Johnson's independence," the commission said.
"Hardwickes also admitted it failed to establish and maintain a system of quality control to ensure its personnel complied with the required auditing and ethical requirements."
Mr Johnson agreed, in a court enforceable undertaking, to cancel his registration as a company auditor and not reapply for registration.
Mr Johnson retired as a partner from Hardwickes in March, and no longer performs any audit services.
Hardwickes notified Consolidated Builders earlier in the same month it had resigned from the audit of the company.
However, Mr Johnson can continue to provide tax agent, accountancy and business advice services that do not involve the work of a registered company auditor.
The Australian Securities and Investments Commission investigated Mr Johnson and Hardwickes between December 2023 and March 2024.
Sarah Court, ASIC's deputy chair, said the conduct of auditors and other gatekeepers was an enforcement priority for the commission in 2024.
"Independence is a fundamental duty of an auditor and we will continue to take action where registered company auditors fail to meet their independence requirements," Ms Court said in a statement.
Hardwickes has also agreed to increase mandatory training for all assurance and audit staff to 10 hours a quarter, with failure to complete the training set to become part of employees' performance reviews.
An external peer reviewer will be required to consider three of Hardwickes' audit files and present a report with recommendations to the firm for a remedial action plan.
Hardwickes will then need to report to the commission after two years on how it implemented the remedial action plan and whether it complied with the court enforceable undertakings.
