KEY POINTS:
It might have brought some small comfort to investors in failed finance companies to see two accountants held to ... .er ... account this week for their failure to adequately audit the books of National Finance 2000 - which went into receivership in 2006.
The numerically diligent manner
in which the Chartered Accounts Institute fined the pair may even have raised a smile or two.
Bruce Arnold Mincham and Michael Derek Wood, directors at Queen St accountants O'Halloran HMT, were censured and ordered to pay costs of $133,347 ... and 18c.
Actually that's $66,673.09 each - the institute may be forced to resort to Swedish rounding when payment is finally made.
But whatever the penalty it is not going to make any material difference to investors.
What it does is send a message to accountants that they can not take companies finances at face value and need to take a stringent approach to auditing in a sector where so many people have their savings at risk.
One assumes that after the string of collapses in the past two years that there would be few in the profession that now need reminding. But it's good to see that the institute hasn't shirked its responsibility
As the first to be formally censured, Mincham and Wood may in some respects claim to be unlucky. They made their errors of judgment at a time when the sector was booming in an environment of easy credit and economy growth.
That's not an excuse and it is unlikely to hold much sway with investors who put great faith in the integrity of auditors who sign off on a finance company prospectus.
It is understood to be the first of at least three cases the Chartered Accountants brings and follows the criminal proceedings being brought by the Companies Office against Bridgecorp directors Rod Petricevic and Robert Roest. The Companies Office has also indicated that this may be the first of several cases they bring against finance company directors.
Then there is the Serious Fraud Office which has begun investigations into the collapse of Bridgecorp and property investment company Blue Chip.
Given the scale of the meltdown in the property finance sector, a small industry looks set to emerge as the various regulatory bodies and industry players pick through the wreckage.
More than $3 billion of investor funds have been lost or are at risk.
As always, it looks like the only sure fire winners out of this will be the lawyers who seem to be one of the few really recession-proof professions.
When the economy is booming, the commercial law firms make their money working on all the bid deals that get done.
When the economy tanks, they are assured plenty of work as all the various participants begin suing each other.
Liam Dann is the Herald's business editor.
