An audit has found there was some prior knowledge of issues before a wall collapse in Tasmania.

Some parties behind the Hobart Myer redevelopment knew that some tenancies in the Cat and Fiddle Arcade had signs of damage weeks before a rivulet wall collapsed.

The collapse in July saw a torrent of water crash through the wall and flood a construction site, closing 15 arcade shops.

Auditor Dale Webster says some representative parties did not follow the legislative process for protection work.

Mr Webster found that people at Silverleaf Investments Pty Ltd, Gandy and Roberts Consulting Engineers, architects Designhaus, PDA Surveyors and Hutchinson Builders were aware of “not insignificant damage occurring to tenancies in the Cat and Fiddle Arcade buildings” 22 days before the buildings failed.

It appears they were aware of cracking in a cement slab and in a wall.

The Building Act 2000 requires property owners and developers obtain agreements from adjacent owners about any measures to protect the adjoining property.

“I accept that the certification and permit process followed is not atypical, and as such I do not make a finding adverse to any party in respect to the building certification and approval process,” Mr Webster said.

“However this audit has highlighted the need for my office to ensure greater clarity and control in respect of the documentation and certification of protection work.

“The tools to address this are available as a part of the Tasmanian Government's new building regulatory framework, which will be implemented on January 1, 2017.”

The auditors are considering further action, something unions have demanded.

CFMEU spokesperson Kevin Harkins said whoever called for work on the Myer redevelopment to continue after the cracks were noted could have cost lives.

“It's just through pure luck rather than management that no-one was killed or injured as a result of these decisions,” he said.

“So there's a good reason to call for harsher or higher penalties when individuals and workers lives are put at risk.”

He called on the Tasmanian Government for tougher penalties.

“There's been discussions before about what penalties should apply and in Tasmania the penalties for breaches of the Work Health and Safety Act are either non-existent or too light,” Mr Harkins said.

“I think it's time the Government made some hard decisions about making sure that if people breach the act ... then they need to be penalised heavily for it.

“It's only pure luck there was no-one on the project at the time and no-one in the shop, otherwise we may have been facing something much more severe than what we have got today.”