West Point Industry Group Audit Matters Report Table of Contents1. Executive Summary2. Introduction3. Discussion4. Audit issues in KPMGi's audit of West Point. Failure to obtain audit evidence. Failure to provide adequate audit opinions:iii. Inadequate fundraising iv. Failure to identify the solvency of the Companyv. Failure to comply with the instructions of the company authority. Expectancy gap5. ASIC action against KPMG and West Point6. Conclusion7. References Executive Summary: The West Point Group of Companies was an Australian-based company that carried out property development activities throughout Australia. To extend its business, West Point obtained secured loans from many banks, but supplemented those secured loans with risky, unsecured mezzanine financing it received from wealthy financial planners, following which it went bankrupt in January 2006. Following an investigation by ASIC, West Point was found guilty of breaching a number of accounting principles and policies regarding proper disclosure before investing money and therefore paying interest from capital investments rather than profit, KPMG auditors did not they qualified audit opinions on the basis of breaches of Australian Accounting Standards. Three KPMG partners, namely Brett Charles Fullarton, Robert Charles Kelly and Jonathan Grant Robinson, were involved in conducting the audit of the West Point group of companies which was banned by corporate watchdog ASIC. Upon failure to identify the Company's solvency, ASIC took action against KPMG for conducting a negligent audit of West Point and failing to identify solvency issues. under section 50 of the ASIC Act for compensation for losses caused by soft auditing carried out by KPMG. ASIC has already separately brought action against directors and officers of the West Point Group, as well as a trustee and several financial services licensees. CONCLUSION West Point Group of was one of the largest Australian giants, dealing with property and real estate businesses which became insolvent and went into liquidation for many reasons, one of which was the soft auditing of a large audit firm KPMG. ASIC has taken action against some of KPMG's auditors and has recovered a large sum from them in compensation for the damage caused by their conduct. REFERENCES: www.asic.gov.auwww.kpmg.com.auThe Business Journal, 2011, Andrew Burrell.Audit Negligence, Publication No. 11-04, KordaMentha