The Australian Securities and Investments Commission has told the Senate that KPMG is not the subject of any audit investigation resulting from its work assessing the financial strength of Paladin-related entities.
Senator Barbara Pocock asked ASIC if was aware of the consultancy doing what she termed “false audits” of two entities called Paladin Solutions PNG Limited and Canstruct International Pty Ltd.
She told ASIC during a Senate estimates hearing in February that the two companies “received more than $2 billion of taxpayers’ money to run immigration detention centres for the Department of Home Affairs”.
Pocock asked if ASIC was investigating KPMG for breaching auditing standards during the latter’s work on Paladin and Canstruct.
The corporate regulator told the Senate that media reports indicate the KPMG did a financial strength assessment of the two companies. Those media reports incorrectly classified these engagements as “audits”.
KPMG is also not the appointed auditor of either of the entities referred to by Pocock.
“We understand from the articles that KPMG did not carry out a statutory audit of financial reports as defined or required by the Corporations Act 2001,” ASIC’s response says.
“Rather KPMG undertook some other procedure to assess the financial stability of a potential government contractor.”
ASIC told the Senate it had no reason to look at KPMG’s work relating to these entities.
“As the work carried out by KPMG was not an audit under the Corporations Act and it appears the ‘financial strength assessment’ was obtained for the purpose of assessing a potential government contractor and not for broader market purposes, an inquiry into the matter is not aligned with ASIC’s current strategic and enforcement priorities,” ASIC’s response to the Senate reads.
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