How Shipton's $9,000 tax advice bill grew to six figures

The tax advice provided to stood-aside Australian Securities and Investments Commission (ASIC) chair, James Shipton was originally estimated as likely to cost $9,000 but ended up costing $118,000.

The Senate Parliamentary Joint Committee on Corporations and Financial Services has been told by the Australian National Audit Office (ANAO) that ASIC’s payment of Shipton’s tax advice had been agreed as part of his original employment arrangements, but at a cost much lower than ultimately occurred.

The auditor-general, Grant Hehir said that the existence of tax advice payment to major consultancy KPMG had been appropriately declared, but that the question was whether it was ultimately consistent with the Remuneration Tribunal rules.

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He said that if the payment had been around the original $9,000 estimate it would have been within those rules.

The committee was also told that the ANAO was uncertain why the ultimate bill rose to $60,000 and was broken up into a series of $25,000 procurement invoices and there was nothing to say how it grew from those three invoices up to the end-point.

The auditor-general suggested there had been an initial failure on the part of ASIC to take the situation seriously leading to him placing pressure on ASIC to deal with the issue.




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Comments

Comments

Looks like someone trying to avoid being caught doing the wrong thing...

correct. obfuscating invoices and miscategorizing to deliberately avoid detection of intentional wrongdoing by miscreants

heads on sticks! I want heads on STICKS NOW!

cfp(r), m.fin plan, fasea first-time passer (in 2 hours with no study)

This a bill for the provision of tax advice....not a tax bill !!
The KPMG bill was $118,000.
At $500 per hour, this equates to 236 hours of tax advice.
Based on an 8 hour working day, this would equate to 29.5 working days of full time work every hour of every day on James Shipton's tax advice only.
If there are approximately 20 working days in a month, this equates to approx a month and a half of work ,every working day to work out James Shipton's tax matters.
.....and then ASIC pay the bill and can't explain why it appears to be so grossly excessive.?
Is this a case of the provider of those services gouging ASIC for a significantly inflated fee ?
ASIC need to disclose the exact details of the KPMG accounts detailing the advice provided and the hours of work completed in relation to the advice.
There are 2 matters at play here.
One.....that ASIC saw fit to pay a $118,000 personal tax advice bill on behalf of an employee.
Two.....that the provider of those services charged fees that were fair and reasonable and demonstrated value to the customer...the customer being ASIC. ( the ultimate payer of the account being the taxpayer).
Is this a gross misuse of taxpayer money and the inability of ASIC to inappropriately value and recognise the source of their funding and income ?
In addition to all this James Shipton must have been in contact with KPMG on a regular and consistent basis in relation to these matters. One would assume that in relation to the size of the tax advice expense, the regulatory of discussion, meetings, provision of detail etc etc would have been significant.
Did James Shipton ever think that the estimated account of $9000 would have been well and truly exceeded based on the level of interaction and the level of advice provided ?
Where are all the records and file notes of the process of James Shipton interacting with KPMG and vice versa ?
When we have just had the current Govt buy a parcel of land valued at 10 times the real value to "connected" parties and we have ASIC pay a tax advice bill to an accounting firm at more than 13 times the original estimated cost it requires serious questions to be asked and details disclosed.

actually, the most important thing is that they tried to (deliberately) hide it. they already knew what they were doing was wrong. so it goes to the intention of the act and willful deceit.

willful, intentional, and wrong misuse of funds with no regard for taxpayer funds.

this wanton recklessness pervades this organization and cascades from the top deep into all its crevasses

cfp(r), m.fin plan (p.s. leave me alone now)

These questions will likely and have probably been asked however will never become public knowledge as this will admit failures and guilt on ASIC's behalf as the watchdog.

afp(r), m.fin plan, fasea first-time passer (in 2.25 hours with no study)

I hear people on the ground say this would be another way to pay a bribe wink... next time they look to audit something green light = we will only find what you want us to find...

Clearly KPMG has done nothing wrong here, because they were paid fees for service.

As Daniel Brammall, Robert "MC" Brown, and Corps Act s932a will all confirm, if the payment method is fee for service that guarantees there is nothing wrong with the quality, appropriateness or expense of that service.

And furthermore, it is inconceivable KPMG could have done anything wrong, because they are accountants. As Greg Medcraft and his good friend Alex Malley would confirm, accountants are all jolly good people, and there is never any need to investigate them for inappropriate behaviour because accountants would never do such a thing.

That right...who could ever forget Alex Malley!!....The Naked CEO...what a winner he was for the CPA!
The only thing "naked" about Alex was that he took the shirt off everyone else's back and kept his on.
What a gross error of judgment from the CPA , a failed and very costly mistake.
Mates with Greg Medcraft?....all makes sense.

If it was a financial planner charging that fee, "Why not litigate?" Was there an agreement in writing beforehand for that fee? Was it good value for benefit?

"We need to look at all that licensee's advisers." :P

What really would be of greater concern to me is that IF KPMG have their snouts in the trough that charges ASIC consultancy fees for "look back"audits on advice over the last 10 years. Maaaates!!!

Far out, James should have engage KPMG on a commission only basis. Fees for Service have killed him.

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