Salary Cap

[Twizzle]

pass

we dont need the NRL to get involved

 

[The EELiminator]

pass

we dont need the NRL to get involved

when has that stopped them?

 

[El Diablo]

http://www.smh.com.au/rugby-league/...l-over-governance-review-20150619-ghs9v5.html

Parramatta Eels risk starting 2016 on minus four points after disagreement with NRL over governance review

Date
June 19, 2015 - 10:00PM

Michael Chammas
Rugby league reporter

The Parramatta Eels are running the risk of starting next season on minus four points after lodging a salary cap breach appeal that does not meet the requirements of the NRL.

Fairfax Media understands the Eels, who lodged their appeal last Friday, are headed for a showdown with the NRL and remain at loggerheads over the governance review that NRL boss Dave Smith demanded Parramatta undertake.

While the Eels have agreed to undertake the review Smith asked for when he fined the club$525,000 and gave them a suspended four-point penalty for salary cap breaches in 2014, there remains conjecture over who will carry out the review.

The Eels want to use their own auditors, PricewaterhouseCoopers (PwC), who they have worked with for several years, to analyse and assess their business operations and structure.

Fairfax Media understands the NRL believes the review should be conducted by a firm with no links to the club, wary of the scope of the assessment Parramatta will ask for and whether the governance review will get to the core issues.

The NRL specifically asked the Eels to undergo an "independent" review of its governance and organisational capability, and implement the changes recommended before February 29 next year.

While the NRL have stepped in to oversee the running of the Newcastle Knights, Wests Tigers and Gold Coast Titans, there is no indication they want to do the same at Parramatta.

The NRL are conscious of the instability at the club in recent years and believe the Eels should be a powerhouse in Australian sport if run properly, hence their demand for Parramatta to undergo the governance review.

The departure of chief executive Scott Seward last week only added to their apprehension, with Smith voicing his concerns at a media conference at the Melbourne Cricket Ground this week.

"One of the reasons that we announced not just a financial penalty, but we also require that there is a review done which is both about their capabilities, i.e. their specific skills to run a salary cap and the way that the governance works around some of the key decisions, is really to prevent some of the turnover (of key personnel) that we're seeing," Smith said.

"I say that from a fan's perspective. I've just received the second round of information so I can't comment what I have received at this point in time. Looking through the eyes of the fans, they want stability. We've got to get ourselves into a position where that club is stable.

"The provisional finding was that we would ask that a review was conducted and that review would be designed to strengthen the organisation of that club such that we prevent some of these things happening in the future. Scott was a talented young man, I wish him well and hopefully he goes on to bigger and better things. But that's one of the reasons why that review [must] take place and the findings of that review will hopefully help stabilise the club for the fans."

 

[El Diablo]

control freak Smith bei8ng a pedant

nothing wrong with PWC

 

[Eelementary]

I can see his point, though - it's not really "independent" if we use a firm with ties to the club.

Having said that, I'm confident PWC would do a good job.

 

[Bigfella]

I know this is only paper talk at present but if we lose 4 points then everyone who has anything to do with this from our end must resign immediately.

The public statements we have made have been absolutely f**king stupid.

 

[Twizzle]

PWC are accredited auditors, how can they not be independent ??

 

[Barry O'Speedwagon]

PWC are accredited auditors, how can they not be independent ??

Because they have a stream of future expected income from audit and non-audit services at stake. Why do you think the law requires audit partners to step down after 5 years with a client?

While using PWC has the advantage of using their existing knowledge of the club's operations, it also has the disadvantage that you are asking PWC to assess, for example, control structures that they have signed-off on in the past. The scope of the review obviously exceeds stuff affecting a statutory audit, but it makes sense that another firm does the review.

 

[Twizzle]

Because they have a stream of future expected income from audit and non-audit services at stake. Why do you think the law requires audit partners to step down after 5 years with a client?

While using PWC has the advantage of using their existing knowledge of the club's operations, it also has the disadvantage that you are asking PWC to assess, for example, control structures that they have signed-off on in the past. The scope of the review obviously exceeds stuff affecting a statutory audit, but it makes sense that another firm does the review.

And this is why I dont have a problem with using them.

 

[Barry O'Speedwagon]

And this is why I dont have a problem with using them.

So you don't have a problem with the rest of the sentence?

Regulators the world over have recognised the problem with actual or perceived conflicts of interest that may occur when auditors provide some types of non-audit services.

Perception and reality matter here.

 

[Twizzle]

So you don't have a problem with the rest of the sentence?

Regulators the world over have recognised the problem with actual or perceived conflicts of interest that may occur when auditors provide some types of non-audit services.

Perception and reality matter here.

No I dont,

I dont see any need to have 2 auditors @ double the cost.

 

[Barry O'Speedwagon]

No I dont,

I dont see any need to have 2 auditors @ double the cost.

It's not at double the cost. It will likely be more expensive, but do you think that PWC are going to do the extra work for free?

 

[Bigfella]

The whole point of an audit is for it to be independent.

We wil just make it look like we are trying to hide something.

And for all El Diablo wants to whinge about "control freaks" the supervision of the salary cap is a regulatory function and control is essential for its operation.

He's the head of the controlling body. He's entitled to be firmly in control.

 

[Suitman]

it also has the disadvantage that you are asking PWC to assess, for example, control structures that they have signed-off on in the past. The scope of the review obviously exceeds stuff affecting a statutory audit, but it makes sense that another firm does the review.

Yes, that is exactly the reason why the auditor should be independent.
And to be perfectly frank, we shouldn't have a say who it is. It's the NRL's laws we have broken, and it is their licence we are given the right to hold.
We should be told to stfu and do what we are told.

Suity

 

[Gronk]

Agree in the independence thing, however to suggest that Price Waterhouse Coopers would fudge findings because past relationships is a stretch.

 

[strider]

Yes, that is exactly the reason why the auditor should be independent.
And to be perfectly frank, we shouldn't have a say who it is. It's the NRL's laws we have broken, and it is their licence we are given the right to hold.
We should be told to stfu and do what we are told.

Suity

The NRL can pay for it too :thumn

Agree in the independence thing, however to suggest that Price Waterhouse Coopers would fudge findings because past relationships is a stretch.

yeah I think PWC have alot more to lose via a dodgy review than their little bit of business with a footy club

 

[Chipmunk]

Agree in the independence thing, however to suggest that Price Waterhouse Coopers would fudge findings because past relationships is a stretch.

Companies like PWC might not "fudge findings", but they will only provide you with the information that you tell them to look for. They will very rarely go outside what they've been told to look for.

If you look at the article, the NRL is concerned about the "scope" of the review.

Parra determining the scope is essentially getting PWC to do an audit and Parra getting a report for exactly what they want to hear.

If the NRL decides the scope, the NRL will get a report for exactly what they want to hear.

The issue with the company doing the audit is a complete load of crap. I'm sure the NRL would be more than happy with PWC doing the review if the NRL provide the scope. I'm sure Parra will not be happy if the NRL provide the scope and PWC will do the audit.

The devil is in the detail, or the "scope" in this instance...

 

[Barry O'Speedwagon]

The scope is certainly one issue, but isn't just that. You do not appoint a firm to review its own past advice. It's not a suggestion that a particular firm (or particular audit partners/managers) are corrupt or incompetent. It is about proper process.

Most well-governed corporations separate internal and external audit functions, and where they are combined by necessity the process is closely overseen by the audit committee.

 

[phantom eel]

PWC are accredited auditors, how can they not be independent ??

:lol:

I can see his point, though - it's not really "independent" if we use a firm with ties to the club.

Having said that, I'm confident PWC would do a good job.

Exactly.

As others have said we should be happy that the NRL determines the scope of the review - and we should be pleased (from a potentially improved governance perspective) that a different consultancy firm gets this review gig.

Don't understand why our club has been fighting against what should be a very welcome process, through which we have much to gain from our cooperation.

 

[Barry O'Speedwagon]

So, anyone still think that we should get the blokes whose advice we are currently taking regarding corporate governance to review our governance structures? Surely it is not worth fighting the NRL on this one.