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Hih insurance case study - Audit, accountability and an auditors ethical dilemma A case study of HIH Insurance

This is followed by sentences of four to eight years which seven people have been awarded. The HIH Royal Commission responsible for investigating this crime was no small affair in Australia s corporate world. In Adler Round No 1 the HIH Royal Commission investigated one of Australia s largest corporate collapses of 5. Did the regulators fulfill their responsible roles? In the year 1998-99 the company reported a financial year loss for the first time in its history, brought about by weak premium rate returns, volatile investments, and a series of significant losses in overseas businesses. It was stated that McGowan told Doff and Rivkin not to trade in these shares. It has been analysed that the auditee is accountable for maintaining the cooperation with the auditors throughout the audit.

The collapse of Health International Holdings HIH was recorded as the biggest corporate collapse in the history. Consider the changes in the South African environment competition, globalisation, employment equity, downsizing, need for innovation, etc, and indicate the suitability of the organisational culture for the future objectives of the organisation.

During the Asian financial crisis, Asia Paper Bag.

To finance the purchase worth 3 00 million Australian dollars, HIH Insurance had to borrow heavily only to find out that share price of the acquired company suffered a threefold decrease.

iii Independence The HIH directors failed to exercise sufficient oversight over the management of HIH. The accountants in HIH insurance company were unethical in that the financial reports that they were presenting to the investors were irrelevant, unreliable and incorrect. Now customize the name of a clipboard to store your clips.

The company appears to have fundamentally misunderstood the degree to which extra provisions need to be made for changes in its market environment.

The phrase was coined with modern usage around the common law world after the release of the Cadbury Report in the UK in 1992.

Did the regulators fulfill their and roles? Billions of dollars of wealth were destroyed, some of HIH s directors and senior management team were thrown into gaol, and there were enormous social and economic impacts on various stakeholders especially employees and HIH insurance policy holders.

As the strategic planning tool, the budget control completely failure, HIH Company adopted the annual accounting methods to cover the awful business performance Lipton, 2003.

Business process, Business Process Modeling Notation, Change 859 Words 5 Pages Corporate Governance HIH What Went Wrong? The radical accounting methods and clever financial reinsurance of the company prevent the board of directors from understanding the severer problems of the unpaid outstanding loss reserve. Michael Rose, a partner with the law firm Allen Arthur Robinson, has identified four reasons why in the last 15 years greater enforcement of white-collar crimes has been pursued There has been a change in attitude by the broader community towards corporate crime This has been coupled with a more sophisticated legal system under the FSRA and Corporations Act amendments There is also a stronger political will to catch corporate crooks at a state and federal level In recent times there has been a greater of businesses by their leaders, which makes it more difficult for the individuals to escape attention. Notre Dame Journal of Law, Ethics and Public Policy 18 501 19.

The discussion, questioning, and resolution of differences is an important part of the learning experience. Many senior employees resent her that she so young to fill the position and what made them more upsets was the fact tax managers did not discuss the promotion. A case study is a powerful way for educators to reflect on the actions of other professionals.

With the company continuing to function purely so as to service old claims, with no new business being taken on board. STRATEGIC DECISIONS THAT CONTRIBUTED TO THE COLLAPSE OF HIH INSURANCE 1 Strategic Decisions that Contributed to the Collapse of HIH Insurance The breakdown of HIH Insurance Group in 2001 is one of the major failures in Australian corporate world. In the beginning her mother just thought that her action. Be clear about how the customer interacts with the Insurance Company.

Actuarial science, Indemnity, Insurance 2339 Words 8 Pages HIH Insurance Company Background HIH was originally found in 1968 by Ray Williams, then was acquired by British company CE Health PLC in 1971, and renamed as HIH in 1995. Justice Owen thought that these directors had met Derek Higgs criteria of independence, before noting that they had both resigned by the end of 1999. But the Royal Commission was also careful to point out that the chairman was not solely to blame the board should have also ensured that proper procedures were in place.

In general, if any NC has given by the auditor then in that case, the auditee must be able to defend its stance and willing to face the NC within the short period of time. Once more, the unfortunate star here is the chairman. Through the study of a lot investigations and researches, the reasons for HIH Company s collapse can be concluded the conflicts of interest were not solved, the serious defects in their corporate governance institutions, the lack of credible independent audit and the uncanny way of accounting covers their financial solvency. Assignment The collapse of HIH has served notice on ASIC and the Australian Government that insufficient attention is being paid on a continuing basis to the failures of corporate governance in Australia, especially from the perspective of directors duties. A drug-testing program would help provide a safer workplace for employees.

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2003 A Royal commission, examined the chain of events that led to the collapse of HIH.

Winterthur Swiss sold its 51 share in HIH Winterthur to the public and HIH changed its name to HIH Insurance Ltd. The case is not a continuous disclosure case, and the expert evidence evaluated by the court in this case is not event study evidence being a particular form of economic analysis directed at isolating, through analysis of statistically significant share price returns, the likely share price impact of a counterfactual disclosure, ie the disclosure which it is alleged ought to have been made. Business proposals, once duly approved him before going to the board were never changed or rejected by the board. This has become established in Australia as there are legal defences at common law in negligence as well as in the Cth for directors and officers who have taken reasonable care. eds International Handbook of White-Collar and Corporate Crime.

And with the beauty of hindsight, it is clear that with better corporate governance, none of them would be where they are today!

This was the largest corporate failure in Australia s history, prompting the Federal Government to establish a Royal Commission on 29 August 2001. But Cooper s attempts to expand stretched resources to breaking point. All rights reserved Disclaimer The reference papers provided by

The government decided to move its APRA from Canberra to Sydney. Worked closely with the Australian Federal Government funded support scheme HIH Claims Support Limited, managed by Wyatt Gallagher Bassett to administer the claims under the Scheme.

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