PwC Australia scandal: What we know so far

Big Four firm PricewaterhouseCoopers is facing one of the biggest crises in Australian corporate history. Here’s how it unfolded.

Consulting giant PricewaterhouseCoopers Australia is facing one of the biggest crises in its history as the fallout over the firm’s misuse of confidential government tax briefings grows.

Here’s what we know so far and why it’s a huge scandal for the professional services giant.

WHO ARE PWC?

PwC is one of the famed “Big Four” accounting firms and provides auditing, accounting, taxation and strategy management for some of the world’s biggest businesses.

WHAT HAS HAPPENED?

PwC Australia has been forced to stand down nine unnamed partners over a widening scandal that is now the subject of a police investigation.

The Treasury department is facing Senate estimates this week, as parliament works to uncover exactly who leaked what at the firm.

The PwC scandal is now the subject of a police investigation. Picture: NCA NewsWire / Andrew Henshaw

WHY IS THERE A SCANDAL?

The heart of the issue is the allegation that PwC Australia misused confidential information to effectively market tax avoidance schemes around the world.

The scandal started in 2015 when Peter Collins, the then head of international tax at PwC, was enlisted by the federal government to help design new laws cracking down on multinational tax avoidance.

Senator Deborah O'Neill called the scandal a “train wreck”. Picture: NCA NewsWire / Martin Ollman

He allegedly leaked confidential tax briefings so the firm could construct schemes to benefit its super-rich clients and has now been referred to the Australian Federal Police.

The head of the Australian Taxation Office, Chris Jordan, told a parliamentary committee on Tuesday that PwC was behind 15 schemes designed to help multinationals sidestep tax laws.

WHEN DID THE SCANDAL COME TO LIGHT?

The issue became public in January but the scandal blew up earlier this month when internal firm emails that detailed the schemes were released to parliament.

The PwC offices at One International Towers, Barangaroo. Picture: John Feder/The Australian

WHAT HAS PWC SAID?

In an open letter, acting chief executive Kristin Stubbins said she wanted to apologise on behalf of the firm for “sharing confidential government tax policy information”, and said nine partners had been directed to take leave.

“We know enough about what went wrong to acknowledge that this situation was completely unacceptable. No amount of words can make it right,” she said.

WHAT IS THE REACTION?

Former Telstra CEO Ziggy Switkowski has been appointed to lead an independent review of PwC’s operations and will report his findings by September.

In a huge blow for the firm, the Department of Finance has effectively banned the firm from any new federal contracts.

Ziggy Switkowski will lead an independent review. Picture: Paul Jeffers/The Australian

Labor senator Deborah O’Neill has warned that anything short of PwC naming all 53 partners and 14 US tech companies involved in the tax advice scandal will be a “continued obfuscation and coverup”.

She said on Wednesday the company was trying to “cover up” what happened and wasn’t being transparent.

“I think what we are seeing is a train wreck and yesterday a few more carriages fell off, this is about cover-up, this is about PwC trying to stem the flow of an artery that’s well and truly open now,” she told ABC Radio.

Greens leader Adam Bandt said the apology from the consulting firm was not enough when the company was refusing to say who had access to the information.

Originally published as PwC Australia scandal: What we know so far