Hih insurance

AAP, compiled by Rob Lundie. Shareholders of HIH are likely to incur significant losses on their investment, perhaps their entire capital.

Hih insurance

The fallout is spreading further from the collapse of the insurance giant, HIH. Now the spotlight's turning on the auditors. When a company starts to perform badly, whose responsibility is it to notice? It is the auditor's job to sign off on a company's books. Should it have known any better, and who is watching the auditors?

But four months' later a different picture emerged. What changed in such a short space of time, or is it possible the auditors got it wrong?

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Well I'm sure that the whole auditing community will see this as a wakeup call. An audit has given an 'all clear' report on a company which has then collapsed very soon afterwards with absolutely massive debts. It would be our largest corporate collapse in Australia.

So the whole auditing community will be looking at how they operate, how much they rely on the information that's provided to them, whether they investigate risk in a deep enough way to actually get to the bottom of risk and, you know, maybe to look at whether they need to improve their standards and their training and the competency of their staff.

It's the responsibility of an auditor to assess the risk of a company, report an accurate position of assets and liabilities, and make sure they've investigated a company's internal reporting to pick up possible fraud. ASIC is unable to confirm or deny whether investigations have already started.

At least one legal firm is considering suing Anderson on behalf of shareholders and policy holders, but it will need to prove they were relying on the information from the auditor being accurate, and that will be difficult.

ASIC can take legal action of its own. It can also recommend that an auditor be stripped of their license. But that decision comes down to another statutory body, the company's auditors' Liquidators' Disciplinary Board. But it's only allowed to deal with matters when they are referred by ASIC.

Well the auditors themselves don't report to a regulator, their client is the company. They carry their own professional indemnity insurance and they can be pursued for mistakes and negligence, etcetera, only through legal action, through civil litigation. I'm not sure who the auditor's insurers are but I certainly hope they're not HIH.

Industries

The chief executive of the Institute of Chartered Accountants, Steven Harrison, says it's easy to blame the auditors but, he says, that's unfair because the buck stops with the company's Board.

The auditors have no responsibility for the management of the company. They have a responsibility for ensuring that the financial statements represent a true and fair view and yes, they do have a responsibility to dig around to make sure that the figures and the profit and loss statements are accurate and that particularly the figures in the balance sheet are accurate, and that they're confident that the assets and the liabilities are reasonably accurately stated.

Hih insurance

But it's not their responsibility to delve into the details of the management of the insurance company and how it's being managed. In the history of corporations' law, there hasn't been a great deal of action taken against auditors. Do you think they're given too much free rein?

I don't agree with that comment.

Hih insurance

Where auditors are found to have been deficient in the performance of their audit, there's been significant action taken against them.HIH Casualty & General Insurance Limited creditors with Non Insurance claims that are Not in Australia have been paid cents in the dollar, and creditors with Insurance claims that are Not in Australia have been paid cents in the dollar.

Facts About HIH Insurance. HIH comprised several separate government–licensed insurance companies, including HIH Casualty and General Insurance Limited, FAI General Insurance Company Limited (FAI), CIC Insurance Limited (CIC) and World Marine and General Insurances Limited (WMG).

HIH Insurance Limited provides insurance services.

PM - Role of auditors questioned after HIH debacle

The Company offers general insurance underwriting, investment funds management, financial services, property and casualty insurance products. Australia's insurance market can be divided into roughly three components: life insurance, general insurance and health plombier-nemours.com markets are fairly distinct, with most larger insurers focusing on only one type, although in recent times several of these companies have broadened their scope into more general financial services, and have faced competition from banks and subsidiaries of.

Although HIH accounted for less than percent of the total assets of regulated financial institutions, it was the second largest general insurance (nonlife) company in Australia and Australia’s largest corporate failure to that date.

HIH wrote many types of insurance in Australia, the USA, and the UK. In Australia, this includes compulsory insurance (such as workers' compensation and compulsory third party motor vehicle) and non?compulsory insurance .

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