The Australian Securities and Investments Commission has initiated legal action in Federal Court against Auditeo Australia, lead auditor Ajm Didarul Islam Khan, and auditor Brian Robert Taylor regarding their handling of audits for the First Guardian Master Fund. The regulator contends that unqualified audit reports issued for First Guardian, a managed investment scheme, and its compliance plan across the 2020–24 financial years were materially misleading and constituted breaches of the Corporations Act 2001.
ASIC chair Sarah Court stated that the audit opinions were provided despite lacking reasonable justification and despite significant audit procedures required under applicable auditing standards not being executed. The allegations center on audit work that occurred before First Guardian Master Fund’s subsequent collapse. The fund’s liquidation took place approximately six months after Auditeo issued its unqualified audit reports. The collapse affected more than 6,000 Australian investors, with liquidators estimating potential losses could reach as high as A$446m.
The enforcement action aligns with ASIC’s 2026 priorities focusing on accountability for First Guardian’s failure and associated funds. Khan holds the position of sole director and shareholder of Auditeo and served as lead auditor for First Guardian’s financial audits. Taylor was engaged by Auditeo to lead most compliance plan audits for First Guardian. ASIC alleges that Auditeo, Khan, and Taylor violated auditing standards through inadequate evidence gathering and failure to exercise proper care and skill during audit work.
Specific allegations include that Auditeo and Khan issued a 2021 audit report without evidence that an actual financial audit had occurred. For the 2022 financial year, approximately A$137m in reported assets remained untested by Auditeo and Khan. This figure increased to approximately A$170m in untested assets by 2023. ASIC has requested the court issue declarations of contravention, impose financial penalties, grant injunctions, and issue other orders as appropriate.
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