PwC reveal tax scandal response scorecard

PwC Australia blocked a staff member entering into confidential policy consultation with the government in the wake of the firm introducing new compliance codes.

PwC chief executive Kevin Burrowes fronts a Senate inquiry into consultancy services at Parliament House in Canberra. Picture: NCA NewsWire / Martin Ollman

PwC Australia has revealed it blocked a staff member entering into confidential policy consultation with the government in the wake of the firm introducing new compliance codes.

In its latest report to the Tax Practitioners Board, PwC said the firm was continuing with its confidentiality compliance training program for staff after the regulator revealed the firm had misused sensitive government tax documents. PwC has been under siege after the TPB banned its former head of international tax Peter Collins and slapped the audit and consulting giant with a good behaviour order.

As part of its punishment, PwC must supply the TPB with a report detailing its efforts to improve staff training and disclosing any issues within the firm.

The report reveals PwC has now pushed all new starters in the firm through tax and confidentiality training in the six months to November. However, PwC noted there were 90 staff, including four partners, who have not yet done the training as they were on leave in the period.

PwC told the TPB it would continue with its training for staff in the coming six months to June 2024, including “additional comprehensive training and education program on conflict identification and management that will be rolled out to all PwC Australia partners and staff”.

The report revealed elements of PwC’s training program for staff which asks staff to learn about honesty and integrity, independence, confidentiality, and competence.

The training also includes a multiple choice quiz, asking staff questions including how to respond to “unethical situations” or identify examples of confidential tax consultation.

PwC’s former head of international tax Peter Collins. Picture: Luis Enrique Ascui

PwC also said it would also insert “a clear policy statement” noting the firm would not approve confidentiality consultation on tax matters “with an organisation listed above where that individual has a client-facing role”. PwC told the TPB its head of compliance had updated the firm’s register of confidentiality agreements and undertaking entered into by the firm’s personnel.

The firm said it had logged “well over 300” confidentiality agreements from staff and was now conducting a review of all nondisclosure agreements staff had uploaded to PwC’s database.

PwC’s report reveals the firm knocked back the only staff member who requested to enter into a new confidentiality agreement for potential consulting on policy or regulatory reform in the period. “On the basis of the information contained in sections 1 to 4 of this report, it is considered that PwC AU complies with items 1, 2 and 3 of the TPB order, and this report forms PwC AU’s compliance statement as required by item 4 of the TPB order,” PwC noted in its report.

TPB chair Peter de Cure said the regulator noted PwC’s response to the tax scandal and the orders by the regulator.

He pointed to PwC’s moves to introduce a management response and action plan in the wake of a review of the firm’s culture by corporate veteran Ziggy Switkowski last year. Mr Switkowski warned PwC’s “aggressive growth agenda” had fed the culture that saw the firm misuse confidential briefings to benefit its tax practice.

Mr de Cure said Mr Switkowski’s report raised concerns about PwC’s governance, culture, risk management and accountability. “We strongly encourage all registered tax practitioners to review and, where necessary, improve their processes of governance, risk management, supervision, culture, training and quality assurance,” he said.

The TPB said it was continuing to monitor PwC “to ensure that any professional standard breaches are dealt with appropriately”.

Originally published as PwC reveal tax scandal response scorecard