Brendan Lyon - Exclusive-PwC Australia ties Google: Bell Potter accuses PwC of fee gouging in AUSTRAC audit

• Google: First time a company has been linked to the scandal

Former KPMG partner urges royal commission into consulting industry following damning report into PwC scandal

Brendan Lyon tells Senate inquiry into federal government’s use of consultants that ‘self-regulation is failing’ across the industry. 

PwC and Allegro’s love child sends mixed signals Neil Chenoweth

The new name is Old English, pronounced Sign, and 1990s Swedish group Ace of Base has the perfect theme song. Picture PwC’s departing partners crooning in late-night karaoke bars, “I saw the sign . . . and I am happy now, living without you, I’ve left you, oh, oh, oh” and “No one’s gonna drag you up to get into the light where you belong”.

There’s been quite enough light shed, thank you. Allegro incorporated the new company on Friday as Bell Holdco Pty Ltd with $10,000 in capital. Its shareholders are Allegro Services IV A with 6.7 per cent, Allegro Services IV B (47.8 per cent) and Allegro Services IV C (45.5 per cent).

It looks like the PwC alumni will get part of the IV C shares, with Allegro obviously planning an eventual IPO. It’s not clear who gets the part IV A shares, but the Tax Office is going to love them. Talk about nominative determinism…

When senators demanded that PwC name names, Scyne wasn’t what they had in mind. This isn’t public accounting. This is risk management, fiddling with definitions to reconcile the irreconcilable. PwC had one last chance to clear the air. Instead, what we have is mixed signals. In Old English.

Exclusive-PwC Australia ties Google to tax leak scandal, sources say

SYDNEY (Reuters) -PwC Australia provided Google confidential information about the start date of a new tax law leaked from Australian government tax briefings, according to two sources familiar with the matter.

This is the first time a company has been directly linked to the national scandal involving the "big four" accounting firm that was first revealed in January.

PwC is facing scrutiny because several years ago a former partner, Peter Collins, who advised the Australian government on anti-tax avoidance laws shared confidential drafts with colleagues about the government's plans that were then used to drum up business with multinational companies.

PwC tipped off Google on timing of Australian tax law

Bell Potter accuses PwC of fee gouging in AUSTRAC audit

Max MasonSenior reporter

Jul 5, 2023 

Bell Potter has accused PwC of acting “unethically and unconscionably” and price gouging after the firm was appointed to audit the high-profile local stockbroking house following demands from the financial crime regulator.

PwC was appointed to audit three parts of the broader Bell Financial business last year after the regulator, AUSTRAC, identified “compliance concerns” and suspect breaches of anti-money laundering rules.

AUSTRAC has already been handed the final audits and last Friday said it would take no further action against Bell Financial and its businesses.

PwC Australia has been embroiled in a tax scandal over conflict of interest and confidential breaches of government information. Luis Enrique

In a statement to The Australian Financial Review, Bell Financial alleged the audit and accounting firm had “acted unethically and unconscionably, given PwC was selected for the audit role by AUSTRAC, in that it overcharged its fees for the audit and misled ... about how much those fees would be”.

The dispute is now in the NSW courts, with PwC attempting to recover unpaid fees for the audit, described by Bell Potter as “excessive”.

The audit as requested by AUSTRAC took in Bell Financial’s stockbroking arm Bell Potter Securities, a non-bank margin lending and investments business known as Bell Potter Capital, and the technology and clearing services division that operates the Bell Direct online brokerage.

“PwC made statements about the amount of its fees which were untrue, both at the start of the audit and during its course,” Bell Financial’s lawyers told the Financial Review on Wednesday. When the issue was raised, PwC “responded in a manner which was arrogant and dismissive”, they added.

Bell Financial alleges PwC also “failed in its promise to issue regular invoices for fees, instead revealing the amount of overcharging only once the audit was complete, thereby denying [Bell Potter] the opportunity to manage the fees in any appropriate way; and charged a relatively high rate for some PwC employees who in some cases did not have the required experience.”

PwC Australia said: “It would be inappropriate to comment while this matter is subject to legal proceedings”.

The stoush between PwC and Bell Potter comes as the consulting firm continues to battle the fallout of the tax leaks scandal, in which some of its partners using confidential government information to help clients sidestep tax laws that one of the firm’s partner was helping Treasury design.

Bell Financial told shareholders on Friday that AUSTRAC had concluded its audit. “After considering the reports, AUSTRAC has decided not to undertake further regulatory action. Accordingly, the external audit process is now complete,” the financial crime regulator said last week.

“AUSTRAC has reiterated the importance for Bell to meet its compliance obligations in the future, and will continue to work with Bell to ensure ongoing compliance, and to monitor the remediation and uplift undertaken by the entities in response to the external auditor findings and recommendations.”

Read more on the PwC tax leaks scandal

• PwC $1 fire sale to Allegro done, new name revealed The freshly branded Scyne Advisory has a big and risky $100 million plan to reshape the industry by creating a huge advisory outfit for public sector clients.
• Mad scramble for PwC staff starts at breakaway Scyne The new government services consultant is briefing people who could move to the carved out company.
• Opinion | PwC to front clients next after taking first crisis step After months of inertia and denial, PwC Australia has finally activated a crisis management plan.
• PwC names eight partners it says were involved in tax leaks scandal PwC will remove eight veteran partners who it says were directly involved in the firm’s tax leaks scandal, or did not adequately address matters.
• The great unravelling: Inside PwC’s game-changing week PwC global has finally seized control of the Australian operation in a devastating come-down for an outfit that has long prided itself on being the premium brand among the big four consulting firms.
• PwC matter referred to federal anti-corruption watchdog The tax leak scandal that embroiled consultancy firm PwC has been referred to the national anti-corruption body which has just opened its doors.
• Chanticleer | Senate report shows PwC still doesn’t get it A committee is asking whether the firm’s response to the tax leaks scandal shows it “lacks the capacity to act in an honest, open, and straightforward manner”.
• PwC tax leaks trigger new inquiry into big four partnerships A new parliamentary inquiry triggered by the PwC tax leaks scandal could lead to the big four firms being forced to restructure or obligated to adhere to rules that currently don’t apply to partnerships.
• Podcast | Why the PwC scandal now has a second wind This week in The Fin podcast, investigative reporter Neil Chenoweth and professional services editor Edmund Tadros on the secrets that have eaten Australia’s largest accounting firm.
• PwC strips two ex-partners ‘involved’ in tax leaks of retirement payments PwC has stripped two former partners of payments from its retirement plan – worth an average of $140,000 a year.
• PwC tax leaks scandal: A timeline | A timeline of the almost decade-long saga timeline of the Pwc Australia tax leaks scandal.Read more coverage from the Entrepreneur Summit 2023