PwC’s conduct should concern US regulators, O’Neill tells PCAOB
The Labor senator has called on the US audit watchdog to review the consulting inquiry’s final recommendations and findings.
PwC’s opaque conduct during the parliamentary investigation into the tax leaks scandal should concern lawmakers and regulators in all countries in which the big four operate, Labor senator Deborah O’Neill has said in a letter to the US audit watchdog.
Senator O’Neill, who chaired the parliamentary joint committee tasked with investigating the scandal, wrote to the Public Company Accounting Oversight Board on Monday to draw attention to the consulting inquiry’s final report.
The letter also alerted the PCAOB of the alleged involvement of a Washington-based PwC partner as a recipient of the leaked Treasury tax briefings.
“In drawing your attention to its report, the committee hopes that its findings and recommendations may be of some interest and relevance to the work of the PCAOB,” the letter said.
Senator O’Neill said the big four dominated both the US and Australian markets for accounting, audit and consultancy services and operated “as international entities sharing common features of structure and governance across multiple jurisdictions”.
“The committee considers that the conduct of its inquiry has revealed challenges for the regulation and parliamentary scrutiny of large multinational accounting firms such as PwC in all jurisdictions in which they operate,” the letter said.
The final report, which was adopted without dissent, was published by the committee last month.
It made recommendations 40 about restrictions on PwC tendering for government work; limits on the size of large partnerships; large firm governance and reporting requirements; and regulatory reform to ensure more oversight of the accounting, audit and consultancy industry, including by the establishment of an Australian equivalent to the PCOAB.
Senator O’Neill also shared the committee’s experience from the inquiry, noting how PwC used its international entities to “frustrate” investigations.
“The committee’s efforts to investigate the breach of trust involving confidential Australian Treasury information was frustrated by the refusal of PwC’s international entities to cooperate with or provide information to the committee,” she said.
She criticised the conduct of PwC during the inquiry, including its “strategic” reliance on the jurisdictional separation of its international entities “to effectively quarantine critical information and frustrate the committee’s inquiry”.
“[It] raises concerns for legislators, policymakers and regulators in all jurisdictions in which large multinational firms operate,” she said.
Despite repeated requests from Parliament, the ATO, the TPB and ASIC, PwC has continued to withhold a key report on its misuse of government information.
The report, commissioned by PwC International from law firm Linklaters in May 2023, contains the identity of the “Dirty Six” international partners that should have “raised questions as to whether the information was confidential”.
However, according to a statement from PwC in September on the Linklaters report last year, it found “no evidence” of PwC personnel outside of Australia misusing confidential information for commercial gain.
When asked by the consulting inquiry to produce the report, PwC chief executive Kevin Burrowes also confirmed no one from PwC Australia had seen it.
Senator O’Neill’s letter also recommended the PCOAB look into recent media reports that PwC International Washington national tax services partner Matthew Chen was a recipient of the confidential tax briefings when PwC was targeting business with US companies operating in Australia.
“While the committee is unaware of the extent to which Mr Chen may or may not have been knowingly involved in the misuse of the confidential Australian Treasury information to design PwC’s tax-avoidance scheme, the committee provides this information in case it is of any relevance to the PCAOB’s important oversight and regulation of public accounting and audit firms operating in the US markets.”
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