PwC gets another rebuke and a penalty from industry body over tax leaks scandal

PwC gets another rebuke and a penalty from industry body over tax leaks scandal

Photo: Adriano via Unsplash

In the latest fallout for PricewaterhouseCoopers Australia from the tax leaks scandal that has dogged the accountancy group all year, an industry disciplinary tribunal has censured the company and issued it a maximum fine of $50,000.

The Disciplinary Tribunal of Chartered Accountants Australia and New Zealand (CA ANZ) also made a full costs order of $45,668 against the company and imposed review and reporting requirements on the firm.

While the sum of the fine is insignificant, the censure delivers a further hit to PwC Australia’s reputation following a Tax Practitioners Board (TPB) order against the firm earlier this year that found it breached the rules governing tax advisors.

It also doesn’t prevent the Professional Conduct Committee (PCC) of CA ANZ from investigating current and former partners of PwC who are members of the association in connection with the leaks scandal.

The TPB found that PwC Australia breached the Code of Professional Conduct by failing to have measures in place to avoid conflicts of interest that ultimately led to its staff leaking to major multinational clients proposed changes to taxation policy gleaned from its business relationship with the federal government.

The tribunal found that by breaching CA ANZ by-laws, PwC Australia had ‘brought discredit upon itself, CA ANZ and the profession of accountancy’. It also found that PwC Australia’s actions had resulted in the ‘undermining of trust in the firm and the profession’.

It has ordered PwC Australia to comply with a regime of reporting, monitoring and review to CA ANZ, in conjunction with other authorities, up until at least 1 July 2026.

This includes, keeping the PCC informed of the progress and results of the TPB-ordered training of partners and staff. The training is aimed at implementing compliance with the TPB Code of Professional Conduct and the management of conflicts of interest.

PwC Australia has also been ordered to deliver progress reports to the PCC on implementing any recommendations made by Ziggy Switkowski, who was appointed by PwC Australia to undertake an independent review of the company’s governance culture and accountability. Switkowski handed down his findings in September.

“I’m pleased to see the independent Disciplinary Tribunal release its decision after what would have been a complex investigation and process that required time to gather information alongside several concurrent investigations including by PwC itself, the parliament and other bodies,” says Ainslie van Onselen, CEO of Chartered Accountants ANZ.

“CA ANZ is committed to ensuring the highest standards of professional ethics and performance expected of leading accounting professionals are met, and that members’ firms uphold their responsibilities for embedding professional ethics and promoting ethical behaviour and we have signalled that our ongoing review program will include these matters.

“It’s an important part of instilling public confidence in the expertise, professionalism and integrity of Chartered Accountants and the profession.”

Van Onselen notes that CA ANZ members recently voted to strengthening the association’s by-laws and sanctions against members. From next year maximum fines imposed at the Professional Conduct Committee level will be increased to $100,000 and at the Disciplinary Tribunal level to $250,000.

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