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The action comes as the firm stood down nine partners and faces pressure to reveal the names of all 53 partners involved in the tax leaks.
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PwC to publish independent report in full
31 May 2023
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11 minute read
PwC has announced it will publish the independent report and recommendations in full as it attempts to save face amongst the scrutiny for its handling of the tax leak.
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Acting chief executive of PwC Australia Kristin Stubbins issued an open letter apologising for the breaches by her company and admitted to the errors that the firm and its employees had made.
“We failed in three ways,” said Ms Stubbins. “First, there was a clear lack of respect for confidentiality. A former PwC Australia tax partner, Peter Collins, breached confidentiality in connection with tax consultations with the Department of Treasury and the Board of Tax in which he participated.”
“Second, PwC Australia did not have adequate processes and governance in place. There was poor decision making. The breach of confidentiality exposed weakness in our culture and processes.”
“Third, we had a culture at the time in our tax business that both allowed inappropriate behaviour and has not, until now, always properly held our leaders and those involved to account.”
To improve and overcome the firm’s previous errors Ms Stubbins said PwC Australia would publish Ziggy Switkowski’s report and recommendations in full when his independent review concludes in September.
The firm also announced two independent non-executive directors would be appointed to its governance board to bring an external perspective and objectivity to PwC’s governance.
Ms Stubbins also emphasised the action that the firm had already undertaken, which included directing 9 partners to go on leave effective immediately and appointing Tony O’Malley as chief risk and ethics leader for PwC Australia.
Calls for the firm to reveal the names of all the individuals in the emails provided by the Senate were rebuffed by Ms Stubbins.
“There has been an assumption by some that all those whose names have been redacted must necessarily be involved in wrongdoing,” she said.
“That is incorrect. Based on our ongoing investigation, we believe that the vast majority of the recipients of these emails are neither responsible for, nor were knowingly involved in any confidentiality breach.”
PwC Australia said it had commenced the process to ringfence any services provided to federal government departments or agencies to enhance their controls to prevent conflicts of interest.
“We are moving to quickly establish separate governance and oversight arrangements for the business by the end of September,” said Ms Stubbins.
“It will cover all services to federal government departments and agencies and include people, operations and governance within its perimeter and be operationally ringfenced from other businesses within PwC Australia.”
“We recognise that enhanced governance, structures and controls are necessary and the decision to ringfence our federal government business is a critical next step. PwC will consult with the Australian government on these arrangements including timing and process.”
It comes as Greens senator David Shoebridge revealed at a senate estimates committee that the defence department had signed two contracts with PwC after the tax leak scandal was known about and had several others worth more than $223 million with the firm.
Mr Shoebridge called on the government to put a pause on providing the contracts even if it was not going to terminate existing ones.
“I think you should terminate the contracts and end it, let’s be clear,” he said.
“But you won’t even put a pause on it. Why won’t you even put a pause on handing public money to PwC while the police investigation is being undertaken.”
Treasury official Roxanne Kelley also revealed the Treasury currently had four contracts still running with PwC, three that would be finished by the end of June, and one that would finish by the end of the year.
Ms Stubbins said while it was clear that “PwC Australia did too little too late” the firm would look to re-earn the public’s trust.
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