PwC Australia provides perfect example of how not to respond to an inquiry, says senator
Senator Paul Scarr is maintaining the rage over PwC Australia and the time it took to provide crucial evidence for a committee inquiry.
PwC Australia has given the community a case study of how witnesses to future parliamentary inquiries should not behave, according to a member of the powerful corporations and financial services committee.
Liberal Senator Paul Scarr said he was aghast at the firm’s failure to cooperate and provide information as early as possible during the inquiry chaired by ALP Senator Deborah O’Neill.
Details sought by the committee, which released its final report a fortnight ago, included the various aspects of the supervised remediation process PwC’s global network had placed the Australian firm under following revelations senior partners had shared information subject to confidentiality agreements.
The global firm also noted in its remediation correspondence the publicity PwC Australia received when it appeared before the robodebt royal commission.
Scarr noted the persistence of O’Neill in trying to get the relevant documentation from the firm so the committee had all of the necessary evidence on how the tax leaks saga came about and who ultimately bore responsibility for the firm’s culture.
“This will be held up for years to come as an example of how not to respond to a parliamentary inquiry and how not to deal with a crisis of confidence in relation to a major world-leading organisation,” Scarr said.
“I was aghast at some of the failures of PwC in the course of this inquiry … their failure to provide full, complete and accurate information at the earliest opportunity.
“Even at the end of the inquiry’s deliberations, there was still key evidence which had been withheld from the committee on the basis of legal professional privilege asserted overseas in circumstances where that privilege was in favour of PwC.
“It was within their control to waive that privilege so the committee could have received all the evidence which the committee sought. PwC chose not to provide that information to this committee, and that should be noted and should be a cause for deep reflection for PwC.”
The committee only received various documents during the dying days of the inquiry’s evidence gathering. This included letters relating to supervised remediation as well as the services agreement between PwC Australia chief executive officer Kevin Burrowes and the global network that enabled him to pocket $1.2 million. This took his remuneration package to $4 million plus bonuses.
That $1.2 million paid to Burrowes comes via a local subsidiary owned by the network firm based in the United Kingdom. This was only revealed when the ultimate owner of the Australian-based subsidiary was searched for by The Mandarin using ASIC’s company database.
A further concern for the committee was that PwC Australia and its global network did not provide the report by the global law firm Linklatersinto which personnel across international offices received information subject to confidentiality agreements.
The firm has not provided the committee with the identity of the six people that were identified by the Linklaters team, but PwC Global provided a summary of the processes the law firm went through to understand what went on.
Scarr said that Burrowes told the committee he, as chief executive officer, would prefer to focus on the future of the accounting profession but that PwC Australia itself was responsible for the committee’s focus on the firm’s conduct rather than crystal ball gazing on the future of the accounting world.
“From my perspective, having the philosophy I have, it’s a great shame that the committee had to inquire to the depth that we had to in relation to the activities of PwC and consider a whole raft of recommendations, which will necessarily mean that there’s a regulatory burden imposed upon those who have done the right thing,” Scarr said.
“That is a great shame and something which PwC should reflect on.”
Scarr’s contribution to the Senate discussion about the committee’s final report accounting, consulting and audit firms followed speeches by O’Neill and Greens Senator Barbara Pocock, who set out the need for regulation of major accounting firms.
The committee’s final report made 40 recommendations, including a radical change in numbers allowed in an accounting partnership from 1,000 to 400 partners, greater transparency for large accounting firms, and an increase in audit inspections by the corporate regulator.
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