[LINK] And this man would be treasurer?!

[Jan Whitaker]

Hockey's spruiking of 'audit' questioned

Peter Martin ECONOMICS CORRESPONDENT
August 20, 2010 - 3:00AM

THE accounting firm that the Coalition says audited its election 
costings has been accused of breaching both auditing and ethical 
standards in a complaint to be lodged with the Institute of Chartered 
Accountants.

''If they had produced a report like this on a prospectus, they would 
be in trouble because it would be an offence under the Corporations 
Act not to comply with relevant standards,'' said Professor Bob 
Walker, of the University of Sydney, a 40-year member of the 
institute who will lodge the private complaint.

''But as this does not fall under the Corporations Act, it is a 
matter for the profession.''

Australian Auditing Standard 804 requires an auditor to ''obtain 
sufficient appropriate audit evidence as to whether management's 
best-estimate assumptions on which the prospective financial 
information is based are reasonable''.

The one-page letter from WHK Horwath attached to the Coalition's 
costings released on Wednesday states the firm relied ''on the 
assumptions provided''.

The standard requires auditors to investigate whether ''all material 
assumptions are adequately disclosed, including a clear indication as 
to whether they are best-estimate assumptions or hypothetical assumptions''.

The costings document discloses no assumptions.

The firm did not assert in the letter that it had conducted an audit. 
It said it had been engaged ''to review the costings estimates 
prepared by the Coalition''.

However, in spruiking the document yesterday the shadow treasurer, 
Joe Hockey, repeatedly described it as an audit.

''We have the fifth biggest accounting firm in Australia auditing our 
books and certifying in law that our numbers are accurate,'' he told ABC TV.

''This is an audited statement,'' he told ABC radio.

The code of ethics requires accountants to endeavour to make sure 
clients and others do not misinterpret their work.

Geoff Kidd, one of the principals of WHK Horwath who signed the 
letter endorsing the Coalition's costings, said: ''We provided one 
document and we believe it speaks for itself."

Christine Jubb, of the Australian National University's National 
Centre for Audit and Assurance Research, said: ''Joe Hockey is 
playing fast and loose, there's no doubt.''

This story was found at: 
http://www.theage.com.au/federal-election/hockeys-spruiking-of-audit-questioned-20100819-12s4z.html 




Melbourne, Victoria, Australia
jwhit at janwhitaker.com
blog: http://janwhitaker.com/jansblog/
business: http://www.janwhitaker.com

Our truest response to the irrationality of the world is to paint or 
sing or write, for only in such response do we find truth.
~Madeline L'Engle, writer

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