Despite nearly 10 months passing since the PwC tax scandal broke, Deborah O’Neill says the audit and consulting industry should not be so quick to move on.
Big 4’s toxic culture ‘alive and well’, says Labor senator
The toxic culture that enabled PwC’s wrongdoings is “still alive and well” despite the public hearings, reviews and apologies that followed the tax leaks scandal, senator Deborah O’Neill says.
Revelations that the firm abused confidential government tax briefings triggered unprecedented crackdowns to address issues in the audit and consulting industry but 10 months later the work was “absolutely not over”, she said.
“There’s still a huge amount of work that still needs to go on inside their cultures – the practice that has been described to us as the pursuit of pure profit,” she told accounting professionals on Thursday during the IPA’s conference panel, ‘Post PwC: where do we go from here?’
“You have a corruption of attitude towards ethical, sustainable trust building in this practice that is profit-oriented, and you have a conflict with the ‘psychic income’ of hanging around with people who are described as the ‘rainmakers’. So I think that that culture is still alive and well.”
“We're really not in a post-PwC world. We're right in the middle of it.”
PwC, apologising in an open letter from then-acting CEO Kristin Stubbins in May, said the firm’s actions were “completely unacceptable” but that it would be “committed to being fully transparent”.
But Ms O’Neill, who chairs the committee at the forefront of the government’s crackdown on the audit and consulting sector, said the behaviour of Big 4 representatives who fronted Senate inquiries showed they were “only still really cracking open the challenges”.
“It's not a good thing when we hear people who’ve been giving evidence to the Senate, reported to us by others as having said: ‘Oh, that was a good hearing. We've got away with it’.”
“That sense of not telling the truth in a public place to the Senate is also a threat to democracy.”
Despite the “despair” expressed to her by members of the audit and consulting industry for inquiries “to be over”, she said a post-PwC recovery period was not a priority or possible until a permanent shift in culture occurred.
“Given the kind of reportage that we're getting back still, given some of the resistance to answering questions on notice, given the despair that I feel in some of the entities in consultancy as well as the audit and assurance sector seem to be conveying of ‘when can this just be over?’ I haven't got a response to it other than to say it's absolutely not over,” she said.
“There is a great deal going on around the ecosystem in which the vital work of audit is occurring. The regulatory structure clearly wasn't working. The cultural practices clearly weren’t working. There's a long way to run in this. It’s not post PwC.”