Tax office row over PwC leaks investigation flares in Senate
ATO Assistant Commissioner Jade Hawkins welcomed Zhang's sentencing, emphasizing the impact of tax fraud on the community and essential services. "Every dollar lost to tax fraud is a dollar taken away from vital public services like hospitals, schools, and infrastructure," Hawkins said.
Operation 4 - Australian Authorities Step Up Fight Against Financial Crimes and Tax Evasion
I have already mentioned patronising politicians this morning, so let me not miss out on mentioning patronising central bankers as well. As the FT reports
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EY Australia grilled at Senate estimates over former partner taken to court by the ATO
EY Australia says there will always be bad apples within large corporations and that no internal controls or governance system is perfect as it defended its failure to detect a former tax partner of alleged significant tax misconduct.
It comes as the Australian Taxation Office launched legal proceedings against the firm’s former partner.
EY Oceania chief executive David Larocca told the hearing that the firm had 11,000 people and that he could not guarantee there would not be someone employed at the firm who would not bypass its policies.
“What I’m focused on is making sure our people are aware of what we stand for. They understand the ramifications if they do this, and then we learn from situations when they do happen because they will,” he said.
EY in November outed itself as the employer, and revealed he took more than $700,000 in unauthorised payments related to the allegations.
On Thursday, a Federal Court judge threw out the former partner’s last-ditch effort to keep his name secret as “an abuse of process” following allegations he promoted a massive tax avoidance scheme.
EY outed itself as the firm that employer in November. Picture: Chris PavlichGreens Senator Barbara Pocock told EY that its structure had failed, and that while there would be bad apples in the workplace, it was a five-year period with “serious misdemeanours alleged”.
“How effective can your policies and your structure be if this former partner was able to fly under the radar for more than five years?” she asked.
The firm responded that it was not a failure of structure, but completely unacceptable behaviour that lasted for five years and that no other person at EY had been found to have taken part in the scheme.
“The former partner received undisclosed financial benefits upwards of $700,000. That is completely unacceptable, and no internal controls or governance system is perfect,” EY Oceania tax and law leader Scott Grimley said.
EY said that the firm has held discussions about how it can make its systems and processes more robust, which formed the basis of its enforceable voluntary understanding, and it has held talks with the ATO about what the agency expects of the firm.
“We are very sorry for those clients that have had to similarly deal with this matter,” Mr Grimley said.
“We have established that the former partner in managing those three clients and that is now subject to the proceedings were matters whereby the former partner has not followed our policies and procedures.”
Mr Yates said that the firm mapped relationships with clients for its teams to undertake and deepen relationships with clients, not to unduly influence people.
“We do as a commercial organisation organise ourselves around clients, that’s the way that any organisation would operate, and we set goals for those clients for the way that the people act in those engagements,” he said.
“That’s the purpose of the maps … we don’t use them, and I’m not sure how you could use them, to unduly influence people but that’s not the intent of them.”
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