Auditing in the Real World Issue1: The HIH Collapse and their Model for the Internal Control Committee Background and Context: The main companies in the HIH Insurance Group were placed in provisional liquidation on 15 March 2001. The collapse of HIV is likely to be the largest corporate failure in Australia to date. The losses and hardship inflicted on the Australian community by this corporate failure have significantly contributed to the current insurance crisis. HIH had a corporate governance model, but the Royal Commission found that HIH failed to review the model to assess its suitability for changing circumstances in the insurance industry. HIH altogether lacked an identifiable long-term strategy and, accordingly, developed only opportunistically. The company's decision to re-enter the US market typifies this, premised as it was upon purely anecdotal evidence and following a well-reasoned strategic decision to withdraw from the market only a few years earlier. The decision to purchase FAI without due diligence, the expansion into the UK market and the Allianz joint venture - a woeful decision with patently predictable yet thoroughly crippling effects on HIH's vital, insurance-premium income stream were examples of problems and reasons for such high profile corporate failure. You are required to dig deeper into the heart of the problems and answer: where were the auditors