‘This may not end well for you’: The secret war behind the PwC inquiry -Neil Chenoweth Jun 3, 2024
Big four consulting firms targeted by new Senate inquiry
Anyone from a major firm listening to the Senate would have gasped in horror. Plus: Which firm exited 11 over their conduct, and who won audits from EY.
Welcome to Professional Life, our free weekly newsletter covering the latest news, moves, and partner promotions for consulting and accounting experts. Sign up here to get it direct to your inbox every Wednesday before it appears online.
Today, we look at the silent reading of a report that will have big four bosses screaming loudly; it’s seventh time unlucky for the ATO official who led the probe into the PwC tax leaks scandal; and EY exits 11 for misconduct. Finally, KPMG has a new phrase to help it avoid “doing a Deloitte”.
In this week’s issue:
Gasps of silent horror from the Senate; tax scandal investigator sidelined
EY exits 11 over misconduct; R&D tax breaks for pizza and pokies
Professional moves: Murdoch’s confidant cuts ties
AI and the professions: 150 ex-consultants train AI models to do the job
#REF!: “Building trust at scale” is the new buzzword
Big four consulting firms targeted by new Senate inquiry
An inquiry will be held into a bill sponsored by Greens senator Barbara Pocock. Bethany Rae
Just after 11:20am last Thursday, Labor senator Karen Grogan stood up in the Senate to present the “seventh report for 2025 of the Selection of Bills Committee”.
With little fanfare, the report was “read” into Hansard but not read aloud. If it had been, and if anyone from a major firm had been listening, they would have gasped in horror.
The report revealed yet another parliamentary inquiry into the major consulting firms.
This time, the inquiry relates to a bill from Greens senator Barbara Pocock – the Public Governance, Performance and Accountability Amendment (Ban Unethical Contractors) Bill 2025.
A Senate committee will examine the bill, which seeks to ban dodgy contractors from Commonwealth work for up to five years, and report back by March 17 next year. The inquiry will accept written submissions until December 12 on its website.
The committee will have the power, but not the obligation, to call firm leaders to provide evidence as part of its inquiry. Given how these senior figures from PwC, KPMG, Deloitte and EY have struggled during past inquisitions, I can already hear the CEOs and their teams screaming into the void. These inquiries are costly, time-consuming and are often embarrassing for the firms and their leaders.
Pocock’s bill is directly related to the Department of Finance’s decision to lift its ban on PwC working for the government. It was a move opposed by Pocock, Labor senator Deborah O’Neill and Liberal senator Richard Colbeck (the three key senators who led inquiries into the PwC tax leaks scandal).
Pocock is unapologetic.
“When the government allowed PwC back into the tender process, it betrayed the Australian public who rightly expected they would be held to account for colluding with multinationals to dodge taxes,” she says. “This gutless decision seriously undermined confidence in government procurement.”
Pocock says the “inquiry will examine the current loopholes within government contracting that allow unethical contractors” to continue winning government work.
“It’s unacceptable that the government must rely on the wrongdoer to agree to banning itself from undertaking future government contracts,” she says.
There are no guarantees about the inquiry’s outcome, who will be called to give evidence, or whether the bill will ever become law. However, the topics likely to be canvassed will cover governance and other issues relating to the operations of the four firms.
That means possible lines of inquiry include the new multipronged investigations by the Tax Practitioners Board into PwC’s tax division; Deloitte’s AI report debacle; and EY’s 2023 decision to fire a partner who got into a bar fight.
EY’s recent energy report may also come up, as well as the work the firms, including KPMG, are doing for the university sector.
ATO official who pursued PwC over tax scandal moved to charities regulator
Tax Practitioners Board chief executive Michael O’Neillwill become a “specialist adviser” to the Australian Charities and Not-for-profits Commission from November 24, according to an all-staff email sent by Tax Commissioner Rob Heferen last Wednesday.
O’Neill famously led the probe into the leaking of confidential government information by PwC partners, and had, until last week, survived six previous attempts to sideline or sack him while he led the tiny agency’s broader investigation into PwC, despite opposition from the Australian Taxation Office.
The attempts included claims that O’Neill was acting illegally in investigating PwC and three unsubstantiated bullying claims against him.
In a startling piece of timing, the executive move was announced the day after The Australian Financial Review revealed details of new investigations into PwC stemming from its scandal over the leak of confidential government tax information.
The new inquiries will now continue without O’Neill, one of the nation’s most experienced tax investigators. The inquiries include assessing whether PwC’s advisers misused legal professional privilege to stymie probes into their conduct, and allegations that the firm misled the Foreign Investment Review Board over whether company restructures were done to cut tax bills.
An ATO spokesman said executive changes were “a regular part of our strategy to build diverse experience and enhance leadership” at the agency. Tax Practitioners Board chairman Peter de Cure congratulated O’Neill “on his appointment to the important new role at the ACNC and for his significant achievements as CEO and secretary of the TPB”.
In a statement received after deadline last Wednesday, Assistant Treasurer Dr Daniel Mulino said the decision to move O’Neill was made entirely by the ATO.
“Senior staffing decisions for the ATO, Tax Practitioners Board and the Australian Charities and Not-for-profit Commission are the responsibility of the independent Commissioner of Taxation,” Mulino said.
“The Tax Practitioners Board has played a critical role in holding PwC to account and the government fully supports its work.
“We note this significant contribution of outgoing CEO Michael O’Neill in this regard and look forward to his ongoing contribution in his new position at the charities regulator – another important part of our regulatory architecture.
“The ATO will continue its longstanding practice of supporting the Tax Practitioners Board through the secondment of senior staff, including the CEO role, which reports directly to the chair of the independent Board.”
EY exits 11 over conduct
EY exited 11 individuals for misconduct after receiving almost 100 complaints in 2024-25, according to the firm’s “Value Realised Scorecard”.
The report, released last week, said “seven complaints resulted in the respondent exiting the organisation, with four of these exits being involuntary”. The complaints included 29 about interpersonal conflict, 22 for bullying and 17 related to sexual harassment.
This brings the total number shown the door at the big four consulting firms to 46, according to their most recent disclosures.
The big firms began disclosing misconduct complaints, with different reporting methods and varied transparency, after a series of reports in The Australian Financial Reviewdetailed how they handled sexual harassment and other issues.
In 2023, EY published a landmark report into its workplace following the suicide of a staff member, which found staff felt overworked, bullied and harassed and were too scared to report bad behaviour.
The firm has now “embedded 21 of the 27 recommendations from the review”, Jenelle McMaster, EY regional deputy CEO and people and culture leader, said in the new scorecard report.
“Formal workplace complaints decreased to 96 from 126 in the prior year, suggesting a positive shift towards earlier, informal resolution,” she said.
EY did not supply comparable exit data in the scorecard report. The firm had 8986 staff as of 2024-25, down from 9665 in the previous year.
KPMG audit wins, R&D tax breaks
KPMG has replaced EY as corporate auditor for two notable listed companies.
Wesfarmers, a conglomerate whose retail businesses include Priceline, Officeworks and Target, has selected KPMG to replace EY as its corporate auditor from July 2027, subject to shareholder approval. The 2025 Wesfarmers audit was worth about $7.4 million in fees for EY.
In addition, shareholders of Magellan Financial Group have approved moving its audit from EY to KPMG. EY earned $1.3 million for the company’s 2025 audit.
Also, be sure to check out the new explainer about the research and development tax break by deputy newsletter editor (and former big four R&D tax expert) Daniel Arbon.
The piece dives into why taxpayers are subsidising gambling, alcohol and Domino’s novelty crusts amid a national innovation crisis.
In other news, The Australian Financial Review won the people’s choice award for “Accounting Industry Media of the Year” at the 2025 Australian Financial Industry Awards on Friday.
On my table at the event, run by the Institute of Financial Professionals Australia, was Above Advisory’s Molly Lim, who won the award for female financial professional of the year, and GDA Group Pty senior financial planner Michael Driessen, who took home three awards, including “Australian Financial Professional of the Year”. Lim has previously spoken to me about her love of accounting.
Finally, last week’s newsletter misspelt the name of Alice Yang, a senior manager at PwC Australia. Apologies.
