A PricewaterhouseCoopers partner, Stephen John Cougle, has agreed to a temporary ban on auditing work following his involvement in approving Centro's misleading financial accounts in 2006-07.
The accounts wrongly classified $2.1 billion worth of debt as non-current when in fact it was current. Centro came close to collapse when it was unable to re-finance the debt during the global financial crisis.
Now a partner at Pricewaterhouse-Coopers, Mr Cougle led the team that audited Centro. He has promised the corporate watchdog he will not practise as a registered auditor until June 30, 2015, and has agreed to additional training, and to submit his first three audits after the suspension for checking by another auditor approved by the Australian Securities and Investments Commission.
A spokeswoman for PWC said Mr Cougle would remain a partner and stay with the firm working on internal issues. "The firm has acknowledged that there was a deficiency in the audit work undertaken for Centro in 2007." Mr Cougle said, "I led the Centro audit team and take responsibility for our work", the spokeswoman said.
The enforceable undertaking follows civil action against current and former directors of Centro and after shareholders settled a class action against the company and PWC for $200 million.
ASIC investigated the 2006-07 reports of Centro Properties Group and Centro Retail Group after the companies came close to collapsing when they could not refinance their debts.
ASIC found "Mr Cougle failed to carry out or perform adequately and properly the duties of an auditor" and was in breach of Australian Auditing Standards.
Commissioner John Price said yesterday: "Following auditing standards is not merely a compliance hurdle to clear. Investors will not be properly informed where audit deficiencies result in material misstatements in financial reports not being detected and addressed."
"There should be no doubt now that auditors must obtain reasonable assurance that a financial report is not materially misstated."