The institute revealed late yesterday it had received a complaint about the conduct of two members of the firm, WHK Horwath.
The Age reported last week that Sydney University accountancy professor Bob Walker was to make the complaint in a private capacity, arguing that if the firm had produced such on a prospectus it would be an offence under the Corporations Act.
The complaint alleges advice provided by the firm was clearly intended to influence the outcome of the election and failed to meet ethical and professional standards.
Professor Walker said yesterday his nine-page complaint alleged that the report prepared by Horwath was not an audit in accordance with the relevant standard despite Coalition figures including Shadow Treasurer Joe Hockey repeatedly referring to it as an audit.
"But there were no disclaimers making this clear... either in their report or after it was issued. In fact there were fewer than you would expect to find on a review of historical information or even on a report an accountant prepared making up a tax return on information supplied."
The Institute has commenced an investigation and may referred the complaint to its Professional Conduct Tribunal "which has the power to impose sanctions on individual members who act inappropriately". It is seeking comment from the members concerned.
Coalition Finance Spokesman Andrew Robb told the ABC the "costings done by Horwarths would be as good as you could get anywhere in the country, including in Treasury".
Horwath had "looked at the veracity" of the Coalition's assumptions and the Coalition would put itself at risk by allowing the Treasury to do the same.
"How do we know that some of the assumptions we used are not tampered with, that different assumptions are not used in a Treasury costing to show that we were out by some figure or not?" he asked.
Published in today's Age
Statement from the Institute of Chartered Accountants in Australia
26 August 2010
The Institute of Chartered Accountants in Australia (the Institute) has received a complaint about a matter that involves publicly raised allegations regarding the conduct of two members with accountancy firm, WHK Horwath, Perth.
The Institute has commenced an investigation which involves an opportunity for the members to respond to the allegations.
Professional Conduct Process
As a professional organisation, membership of the Institute is based on meeting the highest standards of professional conduct and performance. The Institute treats matters that bring the profession into disrepute very seriously.
Issues arising from members’ conduct are investigated under the Institute’s By-laws and relevant cases are referred to the Professional Conduct Tribunal for determination.
Based on legal advice, specific commentary cannot be provided while matters are considered for investigation or for the duration of any subsequent Tribunal hearings. All information relating to complaints lodged with the Institute and produced during the investigation process is confidential.
To ensure the privilege of professional membership is upheld the Professional Conduct Tribunal has the power to impose sanctions on individual members who act inappropriately.
The ultimate sanction that can be imposed is exclusion from membership and withdrawal of the right to use the Chartered Accountants designation. Other sanctions include suspension, reprimand, fines or the requirement to undertake additional professional training.
For further information about the Institute's disciplinary process please visit http://www.charteredaccountants.com.au/A116936841
Auditing Standard 804
Section .02: In an engagement to audit prospective financial information, the auditor should obtain sufficient appropriate audit evidence as to whether:
. management's best-estimate assumptions on which the prospective financial information is based are reasonable for the preparation of the prospective financial information;
. the prospective financial information is properly prepared on the basis of the assumptions;
. the prospective financial information is properly presented and all material assumptions are adequately disclosed, including a clear indication as to whether they are best-estimate assumptions or hypothetical assumptions; and
. the prospective financial information is prepared on a consistent basis with historical financial reports, using appropriate accounting principles.
APES 110 Code of Ethics for Professional Accountants
Section 130.6: Where appropriate, a Member should make Clients, employers or other users of their services aware of limitations inherent in the services to avoid the misinterpretation of an expression of opinion as an assertion of fact.
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