An Australian parliamentary inquiry has made more than 40 recommendations to reform the audit and consulting industry, following a major scandal involving PwC that saw the Big Four firm misuse confidential tax briefings to shape tax strategies for clients ahead of the introduction of new laws in 2016. It calls for key partnerships to be limited to a maximum of 400 partners, down from the current 1,000. Firms of more than 3,000 staff would also be required to implement Corporations Act requirements for governance and accountability and adopt ASX corporate governance principles. The review also calls for the “operational separation” of large firms, barring them from supplying audit and consulting services to the same clients. “This report is the legacy of the PwC tax leaks scandal, and the sector-wide misconduct that was uncovered in the aftermath,” Senator Deborah O’Neill, chair of the parliamentary joint committee on corporations and financial services, said after the report was released, adding that it “marks the end of impunity for a sector which has, for far too long, thrived in darkness.” Assistant Treasurer Stephen Jones said the government will consider the report’s recommendations.
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