PE: Accounting institute to launch PNP intermediary investigation

[CHARLOTTETOWN, PE] — The P.E.I. Institute of Chartered Accountants will launch an official investigation into two complaints of conflict lodged against the firm that audited government’s financial gains from the Provincial Nominee Program.

Albert Ferris, executive director of the P.E.I. Institute of Chartered Accountants, told The Guardian last Friday he was going to present to the institute’s council the concerns raised in the public and the media regarding Arsenault Best Cameron Ellis’s dual involvement with the PNP and Island Investment Development Inc. (IIDI).

The auditing firm acted as both a PNP intermediary and auditor for IIDI, the Crown corporation that administered the PNP. 
Since last Friday, the institute has received two complaints about the firm being in a potential conflict of interest in performing these two roles.

“The complaints were presented at today’s council meeting and they have been referred to the professional conduct committee in accordance to our bylaws,” Ferris said Thursday. “The professional conduct committee will now carry out their investigation.”

Arsenault Best Cameron Ellis audited the financial statements for IIDI for its 2008-2009 annual report. 
But the firm was also one of seven provincially appointed intermediaries for the PNP. Intermediaries matched local businesses with immigrants who then invested between $110,000 and $200,000 on P.E.I. The intermediary companies made approximately $10,000 to $15,000 per investment unit.

So when the province ramped up its immigrant nominations in the spring and summer of 2008 — nominating 1,877 immigrants in five months — those seven intermediaries could have made millions. 
Ferris said he believes an investigation into whether this firm was in conflict is warranted.

“I thought that it should receive further investigation,” he said.

The institute’s rules of professional conduct state that auditing firms must be free of any influence, interest or relationship with their clients’ affairs.
 They also state, “a member or firm shall not perform an audit or review engagement for an entity if the member, firm or a network firm, has a direct financial interest or a material indirect financial interest in the entity.”

The institute’s professional conduct committee will now conduct its investigation and determine whether Arsenault Best Cameron Ellis should go to the discipline committee or whether there are no grounds for the complaints.
 This process could take months, Ferris said.