The “big four” firm is in disarray after a former tax partner working on draughts of new anti-tax evasion legislation leaked private documents to coworkers who then used them to solicit business.
Nine partners at PricewaterhouseCoopers (PwC) Australia were given leaves of absence on Monday, and the firm reorganized its governing board as it faces a widespread scandal involving the misappropriation of secret government tax plans.
The “big four” firm is in disarray after a former tax partner working on draughts of new anti-tax evasion legislation leaked private documents to coworkers who then used them to solicit business.
On Wednesday, the Australian Treasury reported the incident to the police for a criminal inquiry. PwC promised to have any affected workers withdraw from government business a day later.
PwC Australia on Monday ordered nine partners to take leave amid calls to ban the business from working on any government projects, according to a statement.
The announcement also stated that two independent directors would be joining the board, along with the resignation of the risk committee’s head and the chair of the governance board of the company.
A senior government official testified before an inquiry on Thursday that PricewaterhouseCoopers (PwC) has consented to bar employees with ties to the disclosure and use of private Australian tax plans from working for the government.
The accounting company is involved in a widespread scandal because it used secret knowledge about potential tax rules to attract clients. On Wednesday, the Australian Treasury reported the incident to the police for a criminal inquiry.
PwC has consented to bar employees “directly involved and with knowledge” of the violation from existing and future contracts until it has completed an internal probe in September, Finance Department Secretary Jenny Wilkinson told a Senate committee.
An official from PwC declined to comment.
The company has previously stated that it is “committed to learning from our mistakes” and that it would continue to fully cooperate with any inquiries into the situation.
“It is now clear that when we learned of the confidentiality breach and related issues we failed to conduct an appropriate root cause investigation,” acting CEO Kristin Stubbins said in the statement.
“That was the result of a failure of leadership and governance.”
In response to concerns that the issue is “significantly broader” than one partner at the business, PwC has consented to a federal government order to stand down all employees implicated in the alleged abuse of secret information from government work.
The public sector has intensified its response to PwC’s disclosure of private tax policy information in an effort to win business. The head of the Treasury has sent the case to law enforcement and the department of finance and has ordered that any employees “directly involved in, or who had knowledge of, the significant breach” be stood down.
In a previous statement, AFP representatives acknowledged that an “active investigation” has been launched after they “received a report” alleging “unauthorised use or disclosure of confidential information” in violation of the Crimes Act.
Since January, when the Australian Financial Review first revealed that Peter-John Collins, the former head of international tax for PwC Australia, had been deregistered by the tax practitioners board for failing to act with integrity and disclosing private government briefings, PwC has come under fire.
