KPMG denies blame for Westpoint
Auditor KPMG has defended itself against claims that it had some responsibility for the losses incurred by investors in the failed Westpoint group of companies, and clarified its relationship with Westpoint director Richard Beck.
KPMG Australian chief executive officer Lindsay Maxsted said the company understood “various groups and individuals have been keen to apportion blame for their losses”.
“Any such claims against KPMG are unfounded; many of the claimants are in no position to form a view on the quality of KPMG’s audit, and KPMG unreservedly stands by the quality of its audit opinion in relation to Westpoint.
“Accurate and honest dialogue is what is needed around this issue, not ill-informed speculation,” he said.
In a statement released yesterday, the firm also asserted that: “Following a deterioration in Westpoint’s business conditions, any audit opinions issued in relation to the 2005 year were appropriately qualified.
“In 2004, after extensive and appropriate audit work, KPMG issued unqualified audit reports but ensured that for relevant companies, the Notes to the Accounts properly disclosed ongoing concern issues.”
In the statement, the firm supported the Australian Securities and Investments Commission’s (ASIC) need to investigate Westpoint’s collapse, and claimed it had co-operated with the regulator and had reported solvency concerns over Westpoint in line with legal requirements.
It denied that ASIC was conducting a separate formal investigation of the auditor.
KPMG also denied that it had approved “research house documents” that allegedly provided positive financial assessments of Westpoint.
The auditor confirmed that Westpoint director Richard Beck had been associated with the firm between November 1994 and October 1997, but said Beck had been a consultant to KPMG and not held any major positions within the firm, such as chief compliance officer, as was reported on the ABC’s Four Corners program recently.
The firm said there was no connection between Beck’s previous employment and KPMG’s audits of Westpoint.
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