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US PCAOB Fines PwC Australia for Tax Scandal Secrecy

US PCAOB Fines PwC Australia for Tax Scandal Secrecy

by Starling Insights

Starling Insights Editorial Board

Apr 10, 2024


The US Public Company Accounting Oversight Board (PCAOB) has fined PwC Australia $600 thousand for failing to disclose an investigation by Australia's Tax Practitioners Board for over a year, as reported by the Australian Financial Review.

The PCAOB found that the firm's "siloed nature" and lack of transparency in leadership caused the delayed reporting. This fine poses additional risks to PwC's global operations amidst the fallout from a tax leaks scandal involving a former partner sharing confidential government information. "Failure to disclose required information is not acceptable, and the PCAOB will hold firms accountable," said PCAOB Chair Erica Williams.

PwC International, overseeing the Australian firm, recently defied Australian Senate orders to produce a report on international aspects of the tax leaks. The International firm has endeavored to quarantine its Australian arm to prevent the scandal from implicating other firms in its network. The PCAOB's fine marks the first time an overseas regulator has taken action related to the matter.

Under the order, PwC Australia must undertake remedial measures to establish and revise policies and procedures for compliance and reporting requirements. The firm, expressing regret for governance and cultural shortcomings under past leadership, acknowledged the late filing and cooperated with the PCAOB. "This disciplinary order stems from the same issue and we acknowledge this late filing and apologise for our initial failure to report this incident," a spokesman for the firm said. "The firm has cooperated with the PCAOB during this process and has taken a number of steps to improve our policies and procedures related to the reporting requirements."

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