Finance company accountants barred from public practice

Two chartered accountants have been barred from public practice for two years after errors were found in their audits of three companies, including Blue Chip and Capital + Merchant Finance. 

The third company, which couldn't be named until the lifting of an interim suppression order, was Beneficial Finance.

Unlike the other two, it is still operating.

Robert Innes-Jones and Peter McNoe were accused of several breaches of the Institute of Chartered Accountants' code of ethics while conducting audits for BDO between 2006 and 2008. 

As part of their penalty they've been censured, are not allowed to undertake audits of issuers for five years, and the matter will be publicised on the institute's website and in the print media.

They're also ordered to pay the Institute prosecution costs of $320,000 and $285,000, respectively. 

Mr Innes-Jones admitted three charges, while Mr McNoe pleaded guilty to five.  

Other charges were withdrawn. 

The errors occurred in their audits of the companies' financial statements between 2006 and 2008. 

With regard to Blue Chip, Mr Innes-Jones signed an opinion that its financial statements complied with best practice accounting guidelines, when, in fact, they ignored a liability arising from the company's exposure to rental guarantees. 

He also failed to obtain enough evidence to assess the recoverability of $42.5 million of deposits from investors. 

Mr Innes-Jones faced one other charge relating to Beneficial, of failing to support his conclusions relating to the company's debt in 2006-07. 

Mr McNoe also faced one charge relating to Beneficial's audit the following year, of failing to adequately support his opinion relating to the calculation and recovery of bad debt. 

Mr McNoe also admitted four charges relating to an audit of Capital + Merchant Finance for the tax year 2006-07. 

The institute says he didn't act with due care and diligence, failed to audit the company with professional scepticism, and didn't support his audit opinion with sufficient evidence.  

He also didn't prove the audit complied with auditing standards.