Not satisfied with former CEO Tom Seymour as a sacrifice, the PwC tax leak scandal continues to claim victims and chip away at the good name of PricewaterhouseCoopers. Financial Times has reported that overlords from the global office “will seize” oversight of the Australian business because the Aussies screwed up, big time. The issue has produced countless unflattering headlines and even government inquiries questioning the ethics of this prestigious professional services organization.
International executives — some of whom were flown to Sydney by the Big Four accounting firm to assess the immediate damage to its brand — are set to remain in place for an extended period, according to two insiders with knowledge of the decision.
While PwC’s national businesses have autonomy over their operations, its global headquarters is using its rights under the international network’s rules in order to exert influence over the Australian business in response to the misuse of government information, said one of the people, who spoke on the condition of anonymity. PwC’s global office declined to comment.
For weeks, PwC Australia has been battered by negative headlines and reputational damage spreading far beyond our tiny cove of professional services and unusually negative accounting blogs. It doesn’t seem to be healing with time.
A few weeks back, it came to light that once-CEO Tom Seymour was on the emails originating from leaker Peter Collins, emails that contained confidential information from government tax authorities that was then leveraged to generate fees from certain high profile clients. Apple, Google and Microsoft are believed to be among the 23 tech firms PwC Australia approached with scheme to sidestep a tax avoidance law announced in 2015 by treasurer Joe Hockey.
Here’s something else funny:
The scandal came as insiders said the firm had been preparing to publicly roll out the next phase of a plan to increase the independence of its auditors and “build trust” in its business, a central plank of its global branding since 2021.
This was so not in the New Equation.
In an email to select retired partners, acting CEO Kristin Stubbins apologized deeply and promised to fix the firm’s tattered reputation.
“I want to start this note with an apology for not having been able to reach out over the last week to address the issue of unauthorised sharing of confidential tax policy information,” she wrote in the email, as reported by Australian Financial Review (which continues to report everything related to the PwC tax leak with GOAT-like precision and detail). “It’s important you are aware that we have also set up a full response plan which [partner] Nicole Salimbeni is leading with me, and that work streams are under way to ensure we get our business reputation back on track,” she wrote. “We recognise we need to rebuild trust. We’re listening closely to clients and other stakeholders, including the federal government and regulators, and will engage openly and transparently as we move forward. Finally, I’m sorry that the actions you’re reading about don’t reflect the high standards we expect of ourselves and the firm.”
One retired partner who spoke to AFR said the email seemed “a bit cynical … there’s no real surgical removal [of those involved]. They’re trying to buy time. They’ve got a review which will take until September.” Another said quite reproachfully: “I think they must have believed that if they keep their heads down it will go away.”
PwC’s global bosses to seize oversight of scandal-hit Australian team [FT]