PracticeAccounting FirmsAustralian regulator takes legal action against KPMG

Australian regulator takes legal action against KPMG

The Australian corporate regulator has taken legal action against KPMG over collapse of property group

The Australian corporate regulator,
The
Australian Securities and Investment Commission
, has taken legal action
against KPMG over its auditing of companies in Westpoint, a property group which
collapsed in early 2006 with losses of more than AUS$300m (£115m).

ASIC claims the firm was negligent when auditing the accounts of various
Westpoint companies for the years ended 30 June 2002, 2003 and 2004 and is
seeking AUS$200m in compensation for investors.

‘The proceedings brought by ASIC allege that KPMG negligently carried out
audits of the plaintiff companies by failing to identify issues related to the
continuing solvency of the companies and failing to qualify audits of the
companies,’ Tony D’Aloisio, ASIC chairman, said in a statement.

‘The claim also alleges that KPMG should have notified ASIC that it had
grounds to suspect that breaches of the Corporations Act were taking place
within the plaintiff companies, including breaches of directors duties and rules
against insolvent trading.’

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