Login
iscover
The second commissioner told the Inquiry into Consulting he regrets not escalating the PwC matter more rapidly given the dramatic impact the TPB’s decision had.
Newsletter
ATO ‘underestimated’ impact of Collins licensing decision: Hirschhorn
23 April 2024
•
10 minute read
Second Commissioner Jeremy Hirschhorn has admitted he “fundamentally underestimated” the effect that the TPB’s publication of its findings on Peter Collins would have on PwC in a recent hearing for the Inquiry into audit, assurance and consulting.
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
The Tax Practitioners Board issued a release in January 2023 advising that former PwC partner Peter Collins had been banned as a tax agent for integrity breaches. The matter was highly publicised and has since seen the culture and ethical practices of PwC and other big four firms highly scrutinised in two major inquiries.
“If I had understood what a dramatic impact the publication of a licensing decision would have, I think we would have seen it as a more important remedy against the behaviour of PwC,” Hirschhorn told the committee.
“[At the time] we did not view it as a very effective or very strong remedy. We deprioritised the licensing decision perhaps more than we could have.”
Hirschhorn said after reflecting on the events surrounding the matter, he believes the ATO could have expedited the matter to the TPB more quickly.
“If I was in the same situation again, it would be to move through the three phases of AFP interaction, promotor penalties and TPB referral more quickly so that it would get to the TPB earlier,” he said.
“To be blunt, between the ATO and TPB there’s been other adverse findings in relation to licensing decisions and promoter penalty decisions against partners of big firms and they’ve been page 10 of The Australian Financial Review for one day so we did not anticipate that this would get such as a significant public response.”
Senator Barbara Pocock said there had been increased public awareness about the huge growth in consulting and concerns around whether there are appropriate, ethical practices in these firms.
“As we have discovered over the past year, this is not just an issue confined to PwC. There are a range of different behaviours that our inquiry has surfaced and it shows just how important it is that such matters do receive public attention,” said Senator Pocock.
“The average voter now is very literate about PwC and can tell you about what the TPB is and have watched this with great interest.”
Hirschhorn was also questioned about whether the TPB should be completely removed from the ATO and made a separate entity.
Given the relatively small size of the TPB, the second commissioner said the TPB may struggle to attract staff if it was entirely its own independent entity.
“It may be difficult to attract the right kind of staff to a small agency without a guaranteed path back to the ATO,” he said.
“So the secondment recommendation is one where there are pros and cons because you have to think about the long-term staffing go the TPB.”
You need to be a member to post comments. Become a member for free today!
