Accounting firm Andersen has been accused of knowing that its Australian client HIH Insurance kept misleading financial documents.
The Royal Commission into the collapse of HIH, heard today that there were indications from certain documents that Andersen signed accounts that overstated, or incorrectly stated, the company's financial position as at June 30, 2000.
The inquiry was also told that Andersen partner Jon Pye ought to have been aware of the "falsity" of accounts of an HIH subsidiary, due to the alleged backdating of a A$200m (£73m) preference share issue to another HIH company.
Andersen, which isn't expected to respond to the comments at the lengthy inquiry until April, issued a statement warning that it is too early to jump to conclusions.
"Until Andersen has the opportunity to put its side of the story before the commission, it is premature and unfair to reach any conclusions," Anderson partner Stuart Robertson said in the statement.
Andersen is also under intense scrutiny in the US, over its relationship with failed energy company Enron.
HIH, once Australia's second largest general insurer, entered provisional liquidation on 15 March 2001, after saying it would post a loss of A$800m (£293m) for the fiscal first half of 2000-2001. Its total losses could be as much as A$5.6bn (£32.1bn).
In Australia, Royal Commissions are appointed by the government, but are independent and have broad powers in calling witnesses.
