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Independent review of Coalition election costings breached accounting standard -

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MICHAEL BRISSENDEN: Over the years the electoral fortunes of political parties from all sides have climbed and fallen on the strength of how well their spending promises and forecasts stack up.

But now concerns about how much faith voters should put in those assurances appear to have been borne out by a new finding that the costings Treasurer Joe Hockey took into the last election breached auditing standards.

Australia's leading professional accounting organisation the CPA (Certified Practising Accountants) has sanctioned the accountant who helped prepare a report used by the Coalition to claim its costings had been "independently verified".

Nick Grimm reports.

NICK GRIMM: In the lead-up to the Abbott Government's 2013 federal election victory, a three-man team of experts was commissioned by the Coalition to provide an independent analysis of campaign costs.

The then shadow treasurer Joe Hockey's independent review panel was made up of eminent number crunchers: the former head of Access Economics, Geoff Carmody; a former head of the Prime Minister's Department, Peter Shergold; and a former Queensland auditor-general, Len Scanlan.

Their report, released two days before election day, concluded the Coalition costings were "based on fair and reasonable assumptions" and enabled the Treasurer to claim its spending promises and forecasts were "independently verified".

Later, a Treasury review found mistakes including double accounting amounting to $11 billion and two years on a complaint to the professional accounting body, CPA Australia, about the review has now been upheld.

It's found that the assurances provided fell below auditing standards and did not acknowledge significant inherent limitations in the review's findings.

A brief statement posted on CPA Australia's website states:

EXTRACT FROM A STATEMENT FROM CPA AUSTRALIA: The disciplinary tribunal found the complaint sustained and imposed the penalty of an admonishment.

NICK GRIMM: While the disciplinary tribunal also found that undisclosed "exceptional circumstances" prevented it from naming the member it would duly admonish, it's understood that Len Scanlan is the only member of the review panel who is a member of CPA Australia and so subject to any sanction by the professional body.

BETTY CON WALKER: Well, there are certain accounting standards that accountants should abide by.

NICK GRIMM: The original complaint was raised by husband and wife number-crunchers, economist Betty Con Walker And Bob Walker, an emeritus Professor of Accounting.

BOB WALKER: The report from this group of people, if it complied with the accounting profession standards, should have included a lot of disclaimers and qualifications which weren't there and talked about limitations of the work.

NICK GRIMM: So how serious is a breach like that of the absence of those disclaimers and acknowledgements that you say weren't there?

BOB WALKER: Well, the accounting profession has a code of ethics and it emphasises that the primary responsibility of members of the profession is to act in the public interest - in the public interest.

And for a defective report of this nature to be issued without qualifications, being suggested by Mr Hockey that his costings were being verified, is just I think a fundamental breach of that. It's not acting in the public interest at all.

MICHAEL BRISSENDEN: Emeritus Professor of Accounting Bob Walker ending that report from Nick Grimm. And AM was unable to obtain a response from Joe Hockey's office prior to that report.