Insolvency fears hit Australia’s plcs

Link: US insurance giant files for bankruptcy

It was undertaken by the Australian Securities & Investment Commission, the country’s chief financial watchdog, to ascertain the health of listed companies, following the American accounting scandals at Enron and WorldCom.

Although the ASIC found no reason to worry in general, it did raise concerns about 166 out of 1,000 listed companies, while it found that another 49 companies had had their accounts qualified by their auditors.

David Knott, chairman of the ASIC, sought to reassure the Australian investment community: saying: ‘There is no reason to believe the type of accounting abuses identified in the US pose a material risk in Australia.

‘In those cases where we have continuing doubts about the reliability of financial reports, inquiries are continuing with the companies and their auditors.’

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