ASIC has begun proceedings against KPMG in respect of its auditing of companies within the collapsed Westpoint Group. ASIC alleges that KPMG negligently carried out its audits because it failed to identify issues relating to the solvency of the companies and failed to qualify its audits. It is also alleged that KPMG should have informed ASIC that it had grounds to suspect that breaches of directors' duties and companies legislation were taking place within the Group.The proceedings have been instigated under Section 50 of the Australian Securities and Investments Commission Act (2001), which enables ASIC to commence proceedings for damages in the public interest. ASIC's statement of claim is available here (this PDF is large: over 350 pages and in excess of 15MB). A summary is available here.
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