PwC's profits in Asia shrunk by 12.7% in the fiscal year ending June 30, as the firm has reeled from high-profile scandals in China and Australia, according to the Financial Times.
In September, PwC was fined $62 million and banned from operating in China for 6 months for having "concealed or even condoned" fraud at collapsed property developer Evergrande. And, in Australia, the firm's revenues have fallen 26% following its tax leaks scandal, which involved partners using confidential government information to advise clients on tax avoidance strategies. Following this, PwC Australia was forced to sell its public sector consulting business to avoid losing government contracts.
These regional struggles have dragged down PwC's global performance, as profits grew just 1%, down from 3.1% in the prior year. "We know that in order to earn and maintain the trust of our stakeholders we need to take a hard look at ourselves and be transparent when we don't get it right," Mohamed Kande, Global Chair of PwC, wrote in the firm's annual report. “We hope that our actions relating to the matter, including leadership accountability, conveyed the seriousness of our commitment to quality and integrity.”
In our 2022 Deeper Dive, "The Costs of Misconduct," we discuss the massive financial and non-financial impacts of misconduct, and whether they can be treated even tacitly as "costs of doing business."
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