Factbox-PwC Australia scandal latest of many around the globe for the firm

3:09 am Monday, June 26th, 2023

By Lewis Jackson

SYDNEY (Reuters) – PricewaterhouseCoopers (PwC) Australia is under fire after a former partner leaked confidential government tax plans between 2014 and 2017 which were then used to drum up work with multinational companies hoping to sidestep new rules.

Acting Chief Executive Kristin Stubbins told state parliament on Monday there would be “severe” consequences for any wrongdoing as the firm tries to contain a scandal that has led it to sell its government practice, source of one-fifth of this year’s revenue, for A$1 ($0.67).

The Australian scandal is the latest in a number the “big four” professional services firm has faced around the globe.

RECENT

Brazil, 2023 – PwC has been drawn into the bankruptcy of Brazilian retailer Americanas which collapsed in January after revealing $4 billion in accounting irregularities. Americanas top management claim certain financial statements were fraudulently altered. Auditor PwC said it was unable to comment on client issues due to confidentiality clauses.

Britain, 2023 – Britain’s Financial Reporting Council imposed a 7.5 million pound ($8.9 million) penalty on PwC for “serious breaches” found in audits of engineer Babcock International between March 2017 and 2018 and one of its subsidiaries in 2018. The fine was discounted by 25% to 5.6 million pounds due to early resolution.

Britain, 2021 – The accounting regulator launched an investigation into PwC over its audit of Wyelands Bank, which was owned by steel tycoon Sanjeev Gupta’s metals-to-finance empire GFG alliance. PwC said at the time it would cooperate fully with the regulator’s enquiries.

U.S., 2019 – PwC paid $335 million to settle claims of “professional negligence”, after a U.S. banking regulator said the auditor should have identified problems leading to the 2009 collapse of Alabama-based Colonial Bank.

India, 2009 – Outsourcing giant Satyam revealed it had fraudulently inflated revenue, income and cash balances by more than $1 billion over five years in what has been called “India’s Enron”. Its auditor PwC and affiliates agreed to pay $33 million in fines and compensation to settle U.S. litigation in 2011. India’s market regulator barred PwC’s local affiliate from auditing listed companies for two years in 2018, but that was overturned the following year.

($1 = 1.4984 Australian dollars)

(Reporting by Lewis Jackson; Editing by Praveen Menon and Sonali Paul)