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Friday, April 26, 2024

Burrowes wants everyone to move on from PwC’s tax scandal

 All Kinds of Scammers and Consulting Imposters are taking over the world



PwC Australia CEO Kevin Burrowes says he wants to start a “new chapter” & calls for everyone to “move on” from PwC’s Global Tax Scam.

Until he coughs up the Linklaters Report & someone is locked up & punished we are NOT moving on.😡 Thank you Barbara, Senate Committee.🙏


Burrowes wants everyone to move on from PwC’s tax scandal

 article

PwC chief executive Kevin Burrowes says it is time to draw a line under the damaging tax leaks scandal that has plagued the big-four firm, while conceding the task of restoring its tattered reputation will take years.

After a horror period in which PwC was blackballed from lucrative federal government contracts, forced to hive off its 100-partner public sector consulting business for $1 and lost another 200-odd partners, Mr Burrowes said he was confident “enough progress” had been made to begin rebuilding.


“We feel we’re in a good position now to start to turn to a new chapter, look to the future and drive the firm with a new strategy,” he said.

But for the 30-year veteran – parachuted in last year to lead the embattled partnership – risks abound in his aspiration to move on from revelations in The Australian Financial Review that PwC staff used confidential information to help clients sidestep tax laws the firm was helping to make.
PwC still faces a hostile federal parliament – with all its powers to compel and hold witnesses in contempt, as well as a media megaphone in overdrive – that believes reform efforts to date amount to little more than “superficial commitments to change”.
There is also an investigation by the Australian Federal Police, up to nine investigations by the Tax Practitioners Board, and multiple investigations by Chartered Accountants Australia & New Zealand – any one of which could plunge the local PwC branch back into scandal and undo rebranding efforts.
But Mr Burrowes said he was confident it was time to begin the pivot.
“If I felt we were not making enough progress around [delivering on PwC’s commitments to change], then it wouldn’t have been the time to look at a new strategy and rebuild the brand,” he told the Financial Review ahead of releasing PwC’s three-year “corporate strategy on page” on Friday.

Refocusing on core client offerings

PwC last September released a plethora of “commitments to change” after a review conducted by businessman Ziggy Switkowski uncovered a “shadow culture”. Among the promises was appointing independent directors to the management board and adopting ASX corporate governance principles.
Titled Our Commitment to Reinvent, the strategy outlines how a leaner PwC – which has gone from about 900 partners in mid-2023 to what is expected to be about 650 later this year and has made about 680 staff redundant in the past year – will refocus on capabilities in auditing, tax advice and deals.
This will be supplemented by four emerging priority areas where PwC believes it has an opportunity to grow: artificial intelligence, “trust in what matters”, the transition to net-zero and business model reinvention.
“Never in my 30 years working in this firm have I seen the level of corporate disruption that is happening at the moment,” Mr Burrowes said.
“We have to look at that level of corporate disruption and make sure the firm is able and capable to serve those clients in the way they want to be served. And that’s why it’s the right time to launch a strategy.”
Mr Burrowes conceded efforts to overhaul the once dominant advisory firm would take time.
“It was never going to be something that was done in six months,” he said. “It’s probably going to take us a couple of years, if not longer, to get all of the actions embedded.” 

Marketing of aggressive tax strategies

But his response to two critical issues illustrated the up hill task ahead.
Asked to what extent PwC, to stay competitive, had to market aggressive tax strategies that got it in trouble last year and how that squared with repairing the brand, he rejected the premise of the question.
“What evidence have you got we market aggressive tax schemes today? … Our tax business is predominantly a compliance tax business; we help businesses gather data from their systems, comply and submit tax returns.”
Asked if that meant he was confident no PwC tax advisers were engaging in marketing aggressive tax strategies, even if legal, Mr Burrowes declined to provide a direct answer on two occasions.

Report into overseas scandal links

Asked about PwC International’s refusal to provide the Senate with a report – conducted by law firm Linklaters – into overseas aspects of the scandal, Mr Burrowes said it was out of his hands.
“I cannot release it because I don’t have it,” he said, adding when pressed: “No, no, no, no, no, I don’t have it, so we have been very clear about that. That is not within my control.”
When questioned about how PwC International’s approach aligned with the strategy’s value of “acting with integrity”, Mr Burrows – whose leadership was imposed on the local partnership by the powerful international office – said: “We are entitled to withhold it should we wish to decide to do so.”
Refusal to waive privilege has prompted the Senate to label PwC’s approach “symptomatic of its problematic engagement”.
The decision has also been questioned by local partners – behind closed doors – who doubt the firm could move on without full disclosure.
“I don’t see it like that at all,” Mr Burrowes said.
Find out the inside scoop about Accenture, Deloitte, EY, KPMG, PwC and McKinsey. Sign up to our weekly Professional Life newsletter.
Ronald Mizen reports on politics, economics, business and the law, with a focus on corporate regulators, lobbyists and investigations from Parliament House, Canberra.Connect with Ronald on Twitter. Email Ronald at ronald.mizen@afr.com
Maxim Shanahan is a professional services reporter at the Australian Financial Review. Email Maxim at max.shanahan@nine.com.au


Facebook’s Australian operations funnelled $1.14 billion – $100 million more than last year – to its businesses overseas in exchange for “services” after the Meta-owned social media giant’s local profits soared 36 per cent in the 12 months to December 31.
Accounts lodged by with the corporate regulator show Facebook Australia, owned by Meta – the parent company of Instagram, WhatsApp and Quest – grew despite a broader advertising slump. It reported $1.34 billion from Australian advertisers in the year, up 6.8 per cent from $1.26 billion the year before.
Facebook Australia describes itself as a reseller of advertising services through an agreement with its related companies abroad. That means it buys the ad spots that appear on the Facebook website and app from overseas affiliates, and re-sells them to local brands and businesses at a higher price.
Meta chief executive Mark Zuckerberg. The company will stop paying Australian publishers for their content despite a 36 per cent rise in local profits. AP
Globally, the company founded by Mark Zuckerberg in 2004, made $US40.1 billion ($61.5 billion) in revenue and $US14 billion in profit in the final three months of 2023. Australia, Facebook’s local managing director Will Easton said, is a proxy for its global growth. “We don’t break out the results. But when you look at kind of the performance of the overall business, Australia is at a very similar rate,” he said in February.
“We’ve seen performance improvements on our platform globally. But we’ve also seen that in Australia, and that’s obviously driven by a pretty significant amount of growth in small, medium and large-sized businesses that use our platform more.”
The  accunts reveal Facebook paid its overseas affiliates $100 million more last year than it did in 2022 for “purchases of services”, up to $1.14 billion from $1.03 billion.
Funnelling more money offshore meant locally reported revenue fell to $209 million in 2023 from $224.6 million the year before. Its local spending on professional services, office expenses and employee benefits fell, giving the Australian entity a post-tax profit boost to $47.1 million in 2023, from $34.7 million.
The number of people working for Facebook in Australia fell by 16 per cent, after Meta announced a plan to cut 10,000 employees. Its local headcount fell to 131 from 156.
The figures posted with the Australian Securities and Investments Commission are a glimpse into Meta’s revenue from Australia. Last year, the Australian Competition and Consumer Commission estimated Meta made around $5 billion from Australian consumers and businesses through the likes of Instagram and Facebook.
Most of that money was spent directly with one of its overseas entities – Facebook Ireland, for example – and therefore does not appear on its local balance sheet.
Despite the increase in Facebook’s local profits, Meta is in the midst of a stoush with the Australian government and media groups after refusing to pay for content posted on its platforms. Facebook has paid an estimated $70 million a year since 2021 to many media companies to host their content, in three-year deals struck under the threat of the former Coalition government’s News Media Bargaining Code. Meta announced last month it would not renew those deals, which all expire over the rest of the year.
The Albanese government says it may draw on the code to force Meta to the negotiating table, and has asked the ACCC to provide a report on the likely impact on publishers.