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ATO expresses frustration over PwC’s alleged concealment of information

The ATO accused PwC of hiding information about six overseas staff who obtained confidential government documents from its Australian branch.

The Australian Taxation Office (ATO) criticized global consulting giant PricewaterhouseCoopers (PwC) for allegedly concealing a report of its key personnel amid an ongoing investigation into the firm’s 2023 tax document leak scandal.

During a Senate hearing on Feb. 9, ATO representatives expressed significant frustration with PwC as the firm did not release the report related to the scandal as requested.

In May 2023, it was uncovered that a former PwC partner shared confidential federal government information within the Australian branch and some overseas partners to create a product that could help businesses avoid paying taxes in Australia.

The disclosure resulted in nine PwC executives being suspended, leading authorities to refer the firm to the Australian Federal Police (AFP) for criminal investigations.

Amid the scandal, the PwC Network appointed law firm Linklaters to investigate the incident and related personnel.

Linklaters later produced a report in September 2023, concluding that there was no evidence that any overseas PwC personnel used confidential information from the Australian branch for commercial gain.

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The report also found that six international staff received the government documents but were not aware that they were confidential.

Nevertheless, the six were disciplined for not asking questions about the nature of the information.

ATO’s Frustration

ATO senior executive Jeremy Hirschhorn told the Senate Committee that PwC had declined to provide information about the six individuals despite multiple requests from the tax agency.

“We share the frustrations of this committee that an organization which claims to be co-operative is deliberately hiding behind the difference between their local firm and the international firm,” he said.

“It’s fair to say PwC is very aware of the interest of the Australian community in that document.

“It would be preferable if that was [provided] in a spirit of true co-operation.”

Echoing the sentiment, Peter de Cure, the chairman of the Tax Practitioners Board (TPB), an industry regulator, said PwC also did not provide the report to his organization.

“We have asked for the report formally, and the response we got was that PwC Australia don’t have a copy of it, and is not able to give it to us,” he said.

However, Mr. de Cure said he had some ideas of who the six individuals were.

“I have a reasonable idea that they’re in New York and, I think, somewhere in California, but that’s an inference from what I’ve read,” he said.

The sign of an Australian Taxation Office shopfront is seen in Canberra, Australia, on May 9, 2014. (AAP Image/Lukas Coch)
The sign of an Australian Taxation Office shopfront is seen in Canberra, Australia, on May 9, 2014. (AAP Image/Lukas Coch)

TPB’s Investigation

At the same time, Mr. de Cure told the Senate Committee that the TPB was conducting nine investigations into the conduct of PwC, with three of them being “well advanced.”

“We have compiled a lot of information, our team is working through that, and we intend to pursue those investigations in the ordinary course of this year,” he said.

“I don’t want to talk about the exact time frames of that for the purposes of protecting the probity of the investigation.”

The TPB chairman also noted that his organization would not base its investigations on the Linklaters report.

While Mr. de Cure pointed out the need for PwC to change its culture in the wake of the scandal, he said such a change would take time.

“The best thing I can say about the big four accounting firms. They’re a bit like a cruise ship,” he said.

“They’re really big machines, they’re hard to stop, hard to slow and hard to turn, so the leadership of PwC has a significant challenge to implement a new culture.”

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