When companies fail auditors pay: Why should Audit NSW not be held responsible for the iCare debacle? And what about Peter Hall's ICAC.....

by Ganesh Sahathevan

 This AFR headline says it all: 
Wirecard debacle just the latest failure for auditors
The story goes on to describe failure by auditors over the past decade and more to detect often fatal financial problems within the companies they audited. Even the top names in the game have suffered penalties for negligence; others like Arthur Andersen were sued into oblivion. Arthur Andersen, as readers may recall, was once the gold standard for auditing profession. 


Government auditors in Australia however, like the NSW Audit Office seem to be a protected species, regardless of the mistakes  made. The matter of iCare seems to have brought to fore a public service like approach to auditing, where public service secrecy is acceptable practise, and the public service habit of plausible deniability is accepted without question by the auditor, regardless of external evidence, even when that evidence is in the public domain. 

As explained previously, the NSW Audit Office seems to be employing a tactic of plausible deniability in an attempt to justify its unqualified audit opinions. 

Audit NSW ought to be subject to the same type of scrutiny and penalties that its private sector counterparts have been subject to for very many years. The public sector auditing system will not work if Audit NSW, and its state and federal counterparts, are treated as if it were a scared cow. 

Speaking of sacred cows, this issue reported by the ABC  suggests that ICAC also needs to be subjected to external scrutiny. It is distressing that iCare has been relied on an ICAC report to defend itself against a whistleblower, given the scandal surrounding iCare:

iCare refused to comment on the treatment of (whistleblower  Chris McCann. In a statement, it said it investigated matters he raised with the assistance of independent third parties. "Matters that were referred to ICAC did not lead to further investigation," the statement said.

TO BE READ WITH 

Did Audit NSW's iCare audit include interviews with former iCare Head Of Compliance Chris McCann-if not why not, if yes, how did Audit NSW miss all that McCann has to tell?

Why a special audit of Peter Hall's ICAC must include a review of his handling of the China donation inquiry , and the NSW LPAB 's dealings with Zhu Minshen