THE corporate regulator has failed to comply with its obligations to the Senate, says an accounting academic who has found yawning gaps in its disclosure of important policy work.
The Australian Securities & Investments Commission (ASIC) is required to publish all files relating to its policy advising functions in six-month file lists. But University of New South Wales accounting academic Jeffrey Knapp has found the agency’s required disclosure has “fallen off a cliff”, a phenomenon he put down to a desire to restrict freedom of information requests.
“If you don’t know an ASIC file exists, then you are hardly in a position of being able to request access to documents from that file,” Mr Knapp told BusinessDay.
ASIC’s most recent list for the six months to June 30, 2011, disclosed only 12 files – equivalent to one file for every 165 ASIC employees.
“In contrast, the list for the six months to December 31, 2007, disclosed 217 files,” Mr Knapp said.
“ASIC appears to be failing to disclose relevant files on its policy making activities in its 2010 and 2011 six-month file lists.”
What went missing? Much guesswork is needed to figure this out, the academic said.
The 12 files included in the ASIC list for June 30, 2011, included no references to policy documents approved and released by ASIC in April/May 2011.
ASIC’s policy work either happens “without documentation or the agency has failed to disclose the relevant files in its Senate order list for 30 June 2011”.
The drop-off in file numbers also corresponds to the time the Senate inquiry into liquidators and administrators was taking place.
ASIC lodged comprehensive submissions to this inquiry totalling 180 pages of detailed analysis. Again there is no file reference in the six-month lists for these submissions.
“I don’t think ASIC’s lengthy submissions to the Senate inquiry in the first half of 2010 were compiled on the back of an envelope,” Mr Knapp said. “Why aren’t the relevant files for the development of these submissions disclosed in ASIC’s six-month lists?”
Poor disclosure practices by ASIC were just a little case of history repeating, he said. It was also around this time that ASIC was silently purging accounting exemption orders from its public database.
Mr Knapp said the ongoing non-disclosure of ASIC’s accounting exemption orders put the agency in dereliction of its record-keeping duties.
Ultimately the apparent omissions in the file lists are a matter for the Senate to investigate. It is their order so it is their rules that appear to have been broken, he said. “Prima facie, ASIC is in contempt of the Senate. “ASIC’s failures to disclose and be transparent about its files and its accounting exemption orders sets a regrettable example for the rest of the marketplace.”