An “event” is putting it lightly.
As you all know by now the PwC Australia tax scandal continues to claim victims and slander the good name of consultants everywhere. In yet another senate inquiry last week, former CEO Luke Sayers got beat up a little by senators sick of hearing “I don’t recall” from former and current senior leadership:
Something else came out of those hearings, too. Per Financial Review reporting, PwC Australia Chief Risk and Ethics Leader Jan McCahey told the inquiry the firm didn’t file the requisite PCAOB Form 3 they were supposed to file within 30 days of a “reportable event.”
A Form 3 is required whenever a firm or partner, shareholder, principal, owner, member, or audit manager of the firm has become a defendant or respondent in a government-initiated civil or alternative dispute resolution proceeding, or an administrative or disciplinary proceeding (other than a PCAOB proceeding), arising out of conduct in the course of providing professional, audit or other accounting services, or any such proceeding has been concluded as to the firm or the individual.
It was Jan 22, 2023 when AFR first reported a PwC partner leaked government tax plans to clients and November 16, 2022 when the Tax Practitioners Board (the TPB) decided to impose an Order on PwC under section 30-20 of the Tax Agent Services Act 2009 (TASA) related to said partner leaking tax plans to clients (and his colleagues).
“[It] was an untimely reporting in view of the difficulties that we have had,” AFR quoted McCahey saying in response to questions from Labor senator Deborah O’Neill. “We remain in discussions with representatives of the PCAOB in relation to that.” Asked when the PCAOB “discussions” would conclude she said: “I’d like it to be finished quickly, senator, but that would be an inappropriate thing to say, I’m sure. But we will continue the dialogue with them and provide all such information as they request. They have, of course, the very appropriate regulatory powers, and we will continue to work with them.” She also mentioned that “information wasn’t available to those who are doing the reporting until the announcement by the TPB was made earlier in the year.”
The PCAOB fined Cohn Reznick $20,000 earlier this year for failing to report a $1.9 million penalty from the SEC issued in June 2022 that the firm didn’t report until December of that year. The Board also fined RSM Hong Kong $10,000, Deloitte & Touche Ltda. of Colombia $15,000, and PwC and BDO member firms in Hong Kong $10,000 each for failing to report their own events (in Deloitte & Touche Ltda.’s case seven events) in 2019.
Given the Board’s recent hard-ass stance on registered firms we should expect a fat, juicy fine and perhaps a slap on both wrists.
Big deal. Hasn’t the PCAOB anything important to worry about? The PWC scandal is in the public domain. That the PCAOB can look at this shows me: the PCAOB enforcement division is overstaffed.