Accessorial Liability – Fund Auditor & Actuary

A superannuation trust needs to be audited annual and be subject to an actuarial review at least every three years if it is a Defined Benefit Fund.

The professional fees of the Fund Auditor and the Fund Actuary are pay from the Trust Estate and so are ultimately paid by the members and beneficiaries of the fund.

The Fund Auditor and the Fund Actuary can have a liability for negligence under tort and/or a liability if they have assisted knowingly in a Breach of Trust by the Trustee or Trustees of the Fund.

More information on Accessorial Liability can be found here.

The nature of an Auditor’s duty of care in the performance of an audit was considered by Lopes LJ in Re Kingston Cotton Mills (No 2) [1896]2 Ch 279 at pp 288-9.

“It is the duty of an auditor to bring to bear on the work he has to perform that skill, care, and caution which a reasonably competent, careful, and cautious auditor would use. What is reasonable skill, care, and caution must depend on the particular circumstances of each case. An auditor is not bound to be a detective, or, as was said, to approach his work with suspicion or with a foregone conclusion that there is something wrong. He is a watch-dog, but not a bloodhound. He is justified in believing tried servants of the company in whom confidence is placed by the company. He is entitled to assume that they are honest, and to rely upon their representations, provided he takes reasonable care. If there is anything calculated to excite suspicion he should probe it to the bottom; but in the absence of anything of that kind he is only bound to be reasonably cautious and careful {Emphasis added}”.

The nature of the Actuary’s duty of care can be expressed in similar terms.

The Fund Auditors have been partners from Price Waterhouse and then PricewaterhouseCoopers (PwC) since at least 1984.

Since 1987 the Fund Actuaries have been Richard Mitchell and Nick Callil.

More details on the falsified Compliance Reports can be found here.

More details on the most recent Actuarial Reports can be found here.

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This tab updated on 8 June 2015