Auckland audit boss fined over Boston accounts

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Craig Hemphill, the head of Markhams Auckland's audit division, has been banned from auditing issuers for five years, fined more than $19,000 and censured by the accounting industry body.

Hemphill yesterday pleaded guilty to four charges of breaching New Zealand Institute of Chartered Accountants rules over his audit of Boston Finance's 2007 financial statements, according to a determination of the industry body's disciplinary tribunal.

Three other charges were withdrawn.

He accepted failing to obtain sufficient evidence that total investment loans of some $42.8 million minus provisioning of $431,000 represented the recoverable value of the asset class, the decision said.

Hemphill also didn't provide an explanation for why he was satisfied a $2.1 million loan to Alpine Pacific wasn't impaired in 2007, nor did he ensure appropriate quality control before signing off on a document that didn't comply with the appropriate accounting standards.

Boston Finance was a wholly-owned subsidiary of Australia's Octaviar Group, which also owned the OPI Finance (formerly MFS) group of companies and is itself in liquidation.

It called in the receivers in November 2009 after freezing repayments in March 2008.

At the time of the moratorium, some 1300 investors had about $38.5 million in the failed finance company, and they received 37 cents in the dollar prior to the receivership.

Receiver Grant Graham of KordaMentha said it wasn't possible to estimate the level of recovery in his latest update in January.

Hemphill has been with Markhams Auckland since 1997, and was admitted as a partner in 2005, according to the firm's website.