Shares in IOOF have tumbled after the financial services firm announced plans for an independent review of its operations amid claims of staff misconduct.
IOOF has hired accounting giant PwC to review its regulatory breach reporting policy and procedures within the firm's research division.
"This will be a thorough review and it is our intention to inform ASIC and APRA of the outcomes," IOOF said in a statement on Wednesday.
The move comes days after Fairfax Media reported IOOF previously investigated misconduct within its business, including allegations of insider trading and cheating on training exams, but failed to always notify the corporate regulator.
Shares in IOOF plunged by 13 per cent on Monday in response to the media reports but staged a recovery during the following trading session.
But news on Wednesday of the PwC review sent the stock sliding once more, with IOOF shares down 36 cents at $9.12.
IOOF insists it is committed to ensuring it meets the highest standards of corporate governance and compliance.
The firm said most of the matters raised by Fairfax reports were old and had been addressed by thorough internal and board reviews, notifying industry regulators, ongoing checks of compliance measures and controls, employee education and independent investigations.
"These initiatives have, where necessary, led to enhancement of processes and procedures and sought to improve the client experience and meet expected standards of compliance," IOOF said.
Analysts at Fat Prophets said the allegations raised a number of concerns about IOOF's ethical standards, culture and lack of integration across its various business segments.
The claims had also damaged IOOF's reputation and raised the prospect of potential legal action down the track, the analysts said in a note to clients.
"In our view, the recent expose on the company's workplace practices does highlight the potential hidden costs of IOOF Holdings' aggressive approach to acquisitions, its hard-line sales mentality and focus on costs," the analysts said.
"While IOOF Holdings' response to the Sydney Morning Herald article appears reasonable in our view, we can't help but think where there is smoke there is fire."
Fat Prophets said it could also take time for IOOF to address any problems with its workplace practices.
The analysts also said the reaction this week by IOOF shareholders indicated the importance the market places on workplace culture, particularly given the federal government's focus on recent financial planning scandals involving the Commonwealth Bank, National Australia Bank and Macquarie.
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