PricewaterhouseCoopers will provide long-term oversight of its Australian operations after the local team was embroiled in a tax evasion scandal.
According to two insiders with knowledge of the decision, international executives – some of whom were flown to Sydney by the Big Four accounting firms to assess the immediate damage to their brands – will stay on for a long time.
While PwC’s domestic business has autonomy over its operations, its global headquarters is using its powers under international cyber rules to exert influence over Australian operations in response to allegations of misuse of government information, one of the people said. Condition. The case of anonymity. PwC’s global office declined to comment.
The response follows emails showing how PwC used information it received while working with the Australian government to win business by advising corporate clients on new anti-avoidance rules.
The chief executive and two other leaders of PwC’s Australian business have resigned amid the scandal, while a former partner has been banned from working as a tax agent for two years.
The scandal comes as insiders say the company has been preparing to publicly roll out the next phase of plans to improve the independence of its auditors and “build trust” in its business, a key feature of its global brand since 2021. The core content of the promotion.
International executives could stay in Australian operations for months or longer, the person added. Another person at the company said having a new management team in Australia could exacerbate the need for international “support”.
The move mirrors the response of rival Big Four firm EY to the collapse of financial services firm Wirecard in Germany following a fraud in 2021 and the crisis of Japan’s Toshiba accounting scandal in 2015. Both firms are EY audit clients.
EY’s global legal, audit quality and communications teams were instrumental in responding to the Wirecard crisis, which saw EY Germany banned from new audit work for two years, people familiar with the matter said. The international audit quality team was in Japan for several months after the Toshiba accounting scandal.
KPMG deployed a similar strategy in 2018, bringing senior international partners to its South African firm after the local business was at the center of a corruption scandal.
PwC said Linklaters would review the involvement of those outside Australia in the scandal and “will have unfettered access to what they need to enable them to conduct investigations and inform their proposed changes”.
Linklaters will have access to earlier internal investigations conducted by PwC and use them in its review, the people said. But PwC Global said the law firm would “form its own independent assessment of what happened in our network”.
Linklaters is free to do additional work and interviews if it wants, a person familiar with the matter said. The review is also expected to consider whether PwC’s culture and policies are in line, the person added.
PwC has not said whether it will publish its full findings or how long the process will take. Ziggy Switkowski, the Australian business veteran who built his reputation when telecommunications company Telstra was taken private, has been appointed to lead an independent inquiry into the conduct of its Australian business commissioned by PricewaterhouseCoopers.
Linklaters and PwC Australia did not respond to requests for comment.
Australian senator Deborah O’Neill, who sparked the release of the emails, accused PwC of “covering up the facts”.
“Some of the information is delivered by signaling to the person requesting the information,” she said. “It’s hardly transparent.”
PwC Global said it was “unacceptable” for its Australian operations to share confidential information.
PwC’s U.S. and U.K. operations declined to answer several questions about the progress of the investigation or who was involved, some of its partners in relation to the emails about classified information.