PwC prioritised profit over purpose, says its former interim chief executive

PwC Australia’s former interim boss, Kristin Stubbins, has told a parliamentary inquiry she was disgusted by colleagues who hid the seriousness of tax leaks from others at the firm.

PwC’s former acting chief executive, Kristin Stubbins, addresses a parliamentary committee.

PwC Australia’s former interim boss, Kristin Stubbins, has told a parliamentary inquiry she was disgusted by colleagues who hid the seriousness of tax leaks from others at the firm.

Ms Stubbins, who took the top job at a time of crisis, said several partners had shown a “flagrant disregard for confidentiality”.

“I’m also very upset that the seriousness of these issues was kept hidden from the broader partnership for so many years,” she told the inquiry on Tuesday.

This comes in the wake of months of damage for PwC after it was revealed former head of international tax Peter Collins repeatedly shared confidential govern­ment briefings with others in the firm in a bid to front-run new tax laws. This saw the Australian Taxation Office take aim at the firm, triggering years of legal fights over access to documents showing PwC’s misuse of confidential information. Ms Stubbins, who was handed the interim CEO role in May, said she remained “deeply upset” at the actions of several members of the firm who misused confidential information. “That points to the uncomfortable truth that despite PwC Australia doing many good things in recent years, there were underlying cultural issues of which most of us were unaware,” she said.

PwC global chair Bob Moritz.

Ms Stubbins appeared before the parliamentary joint committee on corporations and financial services more than two months after departing the firm.

The former head of assurance said she was “completely stunned” about the tax scandal, noting there were no discussions around confidentiality breaches when she joined PwC’s board in 2020.

Ms Stubbins said the tax scandal was a demonstration of “where profit was prioritised over purpose”. “I’ve had to accept that. Others at PwC have had to accept that,” she said.

Ms Stubbins said many of the partners involved in the tax scandal breaches showed a “flagrant disregard for confidentiality,” and were not acting as professionals. “As someone who takes their profession very seriously it’s extremely upsetting,” she said. The remarks before the parliamentary committee were the first time Ms Stubbins has spoken publicly since departing PwC in December.

PwC faced exclusion from new government work after revelations of the tax scandal, with the audit and consulting giant forced to sell its public services consulting arm in a $1 deal with Allegro Funds.

Ms Stubbins said PwC global chair Bob Moritz called her in mid 2023 to tell her she would be replaced by Singapore-based partner Kevin Burrowes.

Kevin Burrowes, who took over as PwC chief executive. Picture: Martin Ollman

She told the inquiry she had wanted to stay on as PwC CEO and had been “very disappointed” by Mr Moritz’s move.

When he arrived in Australia, Mr Burrowes took charge of PwC’s response. He has told parliament the firm has withheld key documents concerning investigations into the scandal from him. This includes a key report from law firm Linklaters.

PwC ultimately published a short statement on the Linklaters review, noting “no evidence that any PwC personnel outside of Australia used confidential information from PwC Australia for commercial gain”.

The review found six staff “should have raised questions as to whether the information was confidential” but those who received information from Australia did not know it was confidential.

This is at odds of the position of the ATO and the Tax Practitioners Board.

Ms Stubbins said she was frustrated by PwC’s move, noting she had expected PwC to publish a “more comprehensive release” into the Linklater’s review, but there had been a thorough investigation.

“There may be very good reasons this has not been released … I just don’t know,” she said.

A PwC spokesman referred to previous statements from the international arm of the firm, noting the six staff in question should not be identified as they had not been found to “ have engaged in wrongdoing”.

“PwC Australia continues to co-operate fully with regulators and has not withheld … names of any individuals outside of Australia who received confidential Treasury information,” he said.

“This same evidence was shared with PwCL in connection with its investigation.”