Tuesday, September 13, 2011

The election was a year ago. Hockey's auditors are still under investigation

The Coalition has set the scene for a new row over costings at the next election threatening to walk away from the planned $25 million official costings unit and use a private accounting firm instead.

Shadow Treasurer Joe Hockey made the threat as The Age learned the accountants who costed his policies last time remain under an ethics investigation.

Geoff Kidd and Cyrus Patell of WHK Horwath in Perth agreed in an unpublicised deal with the Coalition in 2010 to cost its policies making no inquires about “the reasonableness of otherwise of the assumptions used”. The Coalition presented their work as an audit.

The Treasury subsequently found errors of differences of opinion about approach used amounting to $11 billion.

The Institute of Chartered Accountants received a formal complaint from Sydney University accountancy professor Bob Walker within days of the election on August 23 2010.

In May this year Institute chief executive Graham Meyer apologised for the nine-month delay in handling the compliant blaming “the complexity, the availability of material, the availability of witnesses, the availability of tribunal members, a whole range of factors”.

Three months later, and twelve months after the complaint was lodged the Institute’s formal position is that the pair remain under investigation... and that it will make a statement when the process is complete.

But professor Walker said yesterday he hadn’t heard from the Institute since February.

“I emailed the chief executive in November and received a reply from his personal assistant saying he was overseas and would get back in touch on his return”.

“He replied in February saying the Institute was conducting an investigation and I would be informed when it was finalised. He also reminded me of my duty of confidentiality to the principals of WHK Horwath now trading as Crowe Horwath.”

“Since then I have heard nothing”.

The Institute is self-regulating. It is able to fine, expel or suspend members for breaches of its professional standards. There is no outside body to complain to. Mr Kidd is a former Western Australian chairman of the Institute.

Mr Hockey said yesterday he would use a private accounting firm again rather than submit to the proposed new Parliamentary Budget Office unless its rules were changed.

The government’s bill requires the Office to immediately publish on its website any costings it conducts for political leaders during election campaigns. Confidential costings are allowed only outside the campaign period.

Mr Hockey told parliament the requirement would give oppositions no control over the timing of release of their policies and “no prerogative to change a policy if the costing turns out to be substantively different from what was expected”.

The government is insisting on the clause saying it is in line with the existing requirement for Treasury to publish its election costings on-line as soon as they are complete.

But the rule has forced both sides of politics to shun the costings process when in opposition by submitting policies late or not at all.

Mr Hockey’s threat has the backing of shadow cabinet. Treasurer Wayne Swan said the Coalition wanted to keep Australia in the dark about how it would fund a $70 billion black hole.

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

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