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In an interim report released yesterday, the Senate has raised concerns about PwC’s ability to recover its reputation.
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Inquiry report identifies lack of ‘genuine change’ by PwC
28 March 2024
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10 minute read
The latest report, PwC: The Cover-up Worsens the Crime, follows an earlier report released by the Senate Committee in June last year.
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In its findings within the report, the committee said the current PwC leadership has recognised the need for change which is a “significant shift from the previous PwC leadership”.
However, it also stated that it has concerns about the extent to which PwC can change its structure, practices, and culture.
“The committee is not convinced on the evidence provided to it at this point that such substantive change is forthcoming,” it said.
The report said the information provided to the committee by PwC about the individuals involved in the tax leaks scandal so far was “vague at best”.
“In addition to the lack of clarity around which Australian partners were involved in the sharing and monetising of confidential government information, there is very little information about which overseas PwC partners were also involved,” the report stated.
“It is clear, even from the redacted emails provided to the Senate Economics Legislation Committee on 2 May 2023, that numerous email addresses of PwC staff overseas were included.”
The report noted that while PwC Australia chief executive Kevin Burrowes wrote to the committee to provide further information about the international investigation in March, it was limited in nature and simply noted the report prepared by Linklaters.
The Committee also said it is yet to receive information on who from PwC International is making decisions for the Australian firm and what avenues of power and control are available to PwC International, via legal agreement, over PwC Australia.
“Australian regulators, including the ATO, TPB, and the Australian Securities and Investments Commission (ASIC) all face jurisdictional limitations in pursuing wrongdoing by international firms,” the report said.
“If PwC International is calling the shots, other avenues for holding the global firm accountable should be considered.”
In its previous report, the committee recommended that PwC be open and honest with the Australian Parliament and people, and with the international community, by publishing accurate and detailed information about the involvement of PwC partners and staff in the breach of confidential government information.
“This includes the involvement of PwC personnel involved in Project North America. PwC have failed to do this,” the report stated.
“PwC's continued refusal to provide the Linklaters report is symptomatic of its problematic engagement with the committee. A first step to restoring trust with the Australian Parliament would be for PwC to provide the committee with the full Linklaters report at the first opportunity.”
While the report noted efforts made by PwC in response to the tax scandal, such as adopting the ASX Corporate Governance Principle and introducing a governance board, it stated that these were only “superficial commitments to change”.
“The committee has seen nothing of real substance yet. PwC have still made no genuine effort to fully investigate and address the issues,” it said.
“Rather their ongoing approach appears to be to hide behind legal professional privilege and hope it will all go away.”
The committee said the failure of PwC to be completely open and honest as per the committee's recommendations in its first report is reflective of PwC's “failure to genuinely change”.
“The committee does not see how PwC can recover their reputation while it continues to cover up because the two are incompatible. Indeed, the cover-up worsens the crime.”
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