Thursday, September 02, 2010

Abbott's budget accountants under scrutiny

SMH  2 September 2010

After a complaint from Sydney University accountancy professor Bob Walker, the Institute of Chartered Accountants began an investigation into the Coalition's budget accountants.

The code of ethics requires members to ''make clients, employers or other users of their services aware of limitations inherent in the services''.

The standard on the compilation of financial reports suggests the inclusion of an explicit statement in mere reports that ''no audit or review has been performed and accordingly no assurance is expressed''. WHK Howarth has declined to comment in relation to the investigation.

Now that Treasury and Finance are also looking at the veracity of the assumptions (as part of the deal with the independents), the firm looks to have been unwittingly exposed to analysis not contemplated when it took on the assignment.

The plan was that no one outside of WHK Horwath and the Coalition would see the assumptions.

Which is odd when you think about it, because if the Treasury couldn't see the assumptions and the electorate couldn't see the assumptions, how could the first be expected to form a view as to whether it could implement the policies and how could the second form a view on whether it should vote for them?

None of this was meant to matter. After the election the policies and the assumptions behind the costings were to be old news, shredded if the Coalition lost, and superseded by events (most probably the discovery of a ''black hole'') if the Coalition won.

The University of Canberra is exposed to scrutiny as well. Its National Centre for Economic Modelling apparently also modelled some of the more tricky Coalition costings, or at least that's what Robb says. The centre itself has provided no details and released no documents, not even a Horwath-style one-page letter. Like Horwath, it has allowed its name and reputation to be used by the Coalition without releasing work that would make it accountable.

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