Australia Big 4: Tough times at PWC Australia Following Tax Scandal

PwC Australia announced an additional 329 job cuts as part of a major restructuring following a scandal involving a former partner leaking government tax plans.

Job Cuts

The job cuts represent about 5% of staff, and up to 37 partners will accelerate their retirement over the next nine months.

PwC describes the restructuring as a challenging but necessary process to realign the business structure with a new long-term strategy.

These job cuts are in addition to the 338 announced in November.

Since the scandal in January 2023, PwC has also sold its government consulting practice to Allegro Funds for A$1, with about 1,400 staff moving to the new firm, now called Scyne Advisory. PwC stated that individuals who lost their jobs may apply for new roles created by the changes, and there will be no hiring freeze, with new partners to be appointed in July. 

Further Sanctions

Additionally, disciplinary proceedings and sanctions were imposed by the Public Company Accounting Oversight Board (PCAOB) on PricewaterhouseCoopers (PwC) Australia on March 28, 2024. Here are the key points:

1. PwC Australia is censured by the PCAOB.
2. A civil money penalty of $600,000 is imposed on PwC Australia.
3. PwC Australia is required to undertake certain remedial actions.

The violations by PwC Australia relate to its failure to timely report certain matters to the PCAOB, specifically regarding proceedings initiated by the Australian Tax Practitioners Board (TPB) against the Firm. The TPB proceedings were related to conflicts of interest arising from consultations with the Australian government. Despite being aware of these proceedings, PwC Australia did not report them to the PCAOB within the required time frame.

Additionally, it is stated that PwC Australia's monitoring procedures failed to provide reasonable assurance that reportable events were identified and timely reported, violating PCAOB rules and quality control standards.

The Order requires PwC Australia to establish, revise, or supplement its policies and procedures related to compliance with Form 3 reporting requirements within 120 days. They must also provide a certification of compliance within 150 days.

Failure to comply with these requirements may result in further penalties or sanctions under PCAOB Rule 5000.

Source:

• Order Instituting Disciplinary Proceedings, Making Findings, and Imposing Sanctions: 105-2024-015-PwC-Australia (pcaobus.org)