The Australian Securities and Investments Commission (ASIC) has brought multiple criminal charges against EC Audit Pty Ltd, previously known as NSW Audit and was the auditor of troubled financial service provider, Halifax, the regulator announced on Tuesday.

Additionally, the company’s Director and registered Auditor, Robert James Evett, has been named in the indictment. The financial market regulator alleged that the firm breached the country’s audit standards and slapped three charges against both EC Audit and Evett.

The lapses were related to the audits of Halifax’s profit and loss statements and balance sheets for three consecutive financial years.

“In breach of sections 989CA(1) and (2) of the Corporations Act (the Act) respectively, EC Audit failed to conduct each of the audits in accordance with auditing standards, and Mr Evett, as the lead auditor, failed to ensure that each of the audits was conducted in accordance with auditing standards,” ASIC alleges.

EC Audit and Evett have become the first Australian auditors to face criminal charges for violation of audit rules.

The company is now looking at a maximum penalty of A$45,000 for each offense made before July 2017 and A$52,500 for offenses made after that timeline. On the other hand, Evett can face a maximum fine of A$9,000 and A$10,500, respectively, for offenses made around that timeline.

A Doomed Financial Services Firm

Halifax, the company firm whose account the auditor was auditing, is undergoing liquidation. The financial services firm officially entered into administration in November 2018, followed by the cancellation of its Australian Financial Services license.

While speaking to the creditors last year, Halifax administrator said that had A$211 million ($151.5 million) of client funds at the time administrators were appointed on November 23 but only available cash of A$190 million-A$200 million to meet those investments, meaning investors were looking at a loss of between A$10 million to A$20 million.