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The accounting body has admitted the PwC partner responsible for the tax scandal falls outside of its by-laws during a Senate grilling.
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Senators brand CA ANZ’s big 4 regulation an ‘absolute failure’
26 February 2024
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10 minute read
Senators have assailed CA ANZ’s efforts to police the big four firms, calling its complaints process “inadequate” in surfacing misconduct and sanction powers an “absolute failure” in dealing with the tax leaks scandal.
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It comes as CA ANZ conceded to the Senate inquiry into consulting services on Friday that it had no power to punish Peter-John Collins, the PwC partner that leaked confidential government briefings, despite recently beefing up its by-laws to prosecute former members.
Greens senator Barbara Pocock lashed CA ANZ's regulations as “not adequately surfacing enough poor behaviour", with “very weak” instruments of redress in cases when it was found.
“I am not comforted that we have appropriate machinery in place,” she said.
Labor senator Deborah O’Neill said this meant there was a “double-truck distance” between CA ANZ’s enforcement regime and “where the rubber hits the road”.
“This is absolutely no reflection of what this committee and the other committee and the fourth estate has uncovered.”
CA ANZ amended its by-laws last year to close loopholes around prosecuting former members who breached its ethical framework.
But the body's general counsel, Vanessa Chapman, admitted they did not apply to Mr Collins as he had resigned his membership with the body before the TPB banned him in January 2023.
“The rules that were amended last year come into effect on Governor-General assent, so those provisions were not yet effective," she said.
“That’s the law, unfortunately."
Ms O'Neill called the situation an "absolute failure" and said the body's powers should have gone further to include retrospective sanctions for their breaches.
“You guys have to confront the failures that have happened at a leadership level. And I don't hear in your evidence today that you're sufficiently robustly able to engage at that level with dealing with the problems that we've seen now in the public eye,” she said.
CA ANZ has since put a stop order to prevent other PwC members from resigning to escape sanctions and launched individual investigations into their actions.
The committee also heard evidence that CA ANZ had only sanctioned 17 of its 13,920 big four members in the past seven years.
“That’s a very low rate of sanction,” Ms Pocock said. “Are you satisfied with the rate of sanction that you have?”
CEO Ainslie Van Onselen said: “I’m satisfied that where there is evidence of wrongdoing that actions are undertaken fairly and within due process.”
Ms O’Neill also questioned the complaints reporting process in light of big four employees coming to her office and not the accounting body with concerns about potential ethical breaches.
“People wouldn't be coming to us with these complaints if there was an easy open door to you,” she said.
“Something is really, really not working for CA ANZ.”
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