Description: For the second time, New Brunswick Auditor General Kim MacPherson has audited a 2009 decision by the then Liberal government to grant over $60 million in loan guarantees to the construction company Atcon. When the floundering firm failed, the province’s citizens were on the hook for the millions in lost funds while the then Premier, Shawn Graham, was found to be in a conflict of interest, his father having served as a board member on a Atcon subsidiary. The Auditor General questioned Atcon expenditures on the leases of a corporate jet and a luxury car, as well as payments for jewellery and vacation real estate in Aruba. With governance practices like this, perhaps it is no wonder some have decried New Brunswick as a failed state.
Date: October 3, 2017
1) Wiley’s Auditing: A Practical Approach provides definitions for various types of audits. What kind of audit do you think this audit of Atcon would be classified as?
2) Why do you think governments continue to provide financial assistance to business when the risks are so high at times?
3) Discuss the ethical implications of a Premier granting financial assistance to a company when his father served on the board of a subsidiary company.