You wouldn’t know it based on the Australian Financial Review’s (AFR) headline this morning but Deloitte and ASIC are in fact still speaking to each other and registered liquidators should be worried.
The Fin’s Professional Services editor Edmund Tadros reported that Deloitte had laid into ASIC after the regulator apparently determined Deloitte’s 32 per cent audit quality problem rate ranked well above rivals EY (22 per cent), KPMG (21 per cent) and PwC (12 per cent) for big four audits covering the 18 months to June 2018.
Tadros wrote that in response: “Deloitte has attacked the way the corporate regulator assesses audit quality as inaccurate, “not fit for purpose” and too volatile, after revealing its latest inspection findings were the poorest of the big four consulting firms.”
So why should liquidators be worried? Well despite ASIC’s concerns about Deloitte’s audit quality, the regulator is still entrusting the big four accounting firm to survey liquidators about how they manage funds in external administrations.
In an email this morning to registered liquidators ASIC’s Insolvency Practitioners Stakeholder Team leader Thea Eszenyi said “ASIC engaged Deloitte to host the online survey on an external survey platform.
“Your participation in the survey and the information you provide is anonymous. There is nothing in this survey that indicates who it came from.
“ASIC and Deloitte cannot identify participants through the browser or computer used to complete the survey.”
Well who could have absolute confidence in that assurance given the criticisms ASIC and Deloitte have each levelled at the other?
The survey meanwhile requests all liquidators provide information “in relation to risk management practices for the control of funds and bank accounts for external administrations (EXAD).
“Depending on your responses, the survey comprises between 14 to 21 questions relating to EXAD funds management and should take you approximately 15 to 20 minutes to complete.”
Possibly, it’s a response to recent instances of large scale misappropriation of funds held in EXAD accounts.
If you recall former PPB Advisory partner David Leigh was gaoled only last month for a minimum 22 months for pinching $800,000 from the Neolido Holdings liquidation account and there is also an investigation underway currently into alleged misappropriation by liquidator and former Jirsch Sutherland partner Amanda Arnautovic (Young) so it’s hardly a surprise ASIC is moving to identify whether or not gaping loopholes exist in the arrangements commonly observed.
But can the survey results be relied upon in such an atmosphere of enmity? Please take a moment to support INO’s continued chronicling of the insolvency profession.