Cake: Preheat oven to 180 degrees C. Coat two 23cm round cake tins with a non-stick cooking spray.
Stir together flour, cinnamon, baking powder, bicarbonate of soda and salt in a medium bowl.
Beat sugar, oil, eggs and apple sauce in a large bowl until thoroughly combined. Beat in the flour mixture just until evenly moistened. Stir in the carrot, pineapple and juice, sultanas and walnuts. Divide batter between prepared cake tins.
Bake until a skewer inserted in the centre of each cake comes out clean, 45 to 50 minutes. Transfer the pans to a wire rack. Leave to cool for 30 minutes. Turn cakes out onto racks. Leave to cool completely.
Icing: Beat the cream cheese in a large bowl on low speed for 1 minute. Add icing sugar and vanilla essence then beat just until smooth.
To Assemble: Place a cake layer on a serving plate. Spread with a third of the icing. Place second layer on top. Spread remaining icing over the top and side of cake.