PricewaterhouseCoopers (PwC) Australia, the major audit and tax consultancy firm said on Monday (July 3) that a number of Australian senior partners will be removed following a tax leak scandal that has damaged the accounting giant’s reputation.
The firm has found itself in controversy since January this year. It emerged at the time that PwC staff leaked information from a confidential government tax briefing to further the firm’s business interests.
PwC, one of the Big Four accounting firms, said on Monday that eight of its partners “enabled poor behaviours to persist with no accountability”. The firm named these individuals and it includes former Australian chief executive Tom Seymour.
“They are now being held accountable for their misconduct,” interim chief executive Kristin Stubbins said, as the firm released the findings from an internal investigation.
Since the leak came to light, a total of 12 PwC partners have now left the company.
PwC will now drastically restructure its Australian arm in an attempt to move on from the scandal, recently announcing plans to sell its lucrative government consultancy business to a private equity firm for Aus$1 (US$0.67)
AFP quoted officials to say that the company held A$255.2 million (USD 167 million) in government contracts in the last financial year.
The tax leak is being investigated by the Australian police since late May. Meanwhile, the parliament’s powerful finance committee is preparing to grill PwC executives in a series of public hearings.
PwC Australia has previously admitted that it suffered from “poor decision making” and that “aggressive behaviour” in parts of the business allowed “profit to be placed over purpose”.
Australia introduced a series of new tax rules in 2015. They are designed to stop foreign firms from avoiding tax by shifting profits to offshore tax havens.
Earlier this year, a government inquiry found that a senior PwC staffer breached confidentiality rules. This staffer was briefed on the reforms. It was found that the person shared this info with other partners of the firm.
The firm then used this knowledge to “aggressively market” itself to new customers, the inquiry said.
The leak came to light after a lengthy investigation by the Tax Practitioners Board.
PwC apology
Kristin Stubbins, the acting chief of PwC has already apologised for the tax leak scandal.
In her first public appearance since her predecessor resigned over his involvement in the scandal, Stubbins told a state parliament inquiry that an investigation by two law firms would conclude shortly and the firm will name any staff found to have “done anything wrong.”
(With inputs from agencies)
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