PwC Australia may lose government audit contract, Treasury boss says. An official told a senate inquiry that Australia’s Treasury department may not renew a A$1 million audit contract with PricewaterhouseCoopers (PwC) when it expires this year due to the firm’s misuse of confidential government tax plans.
The multinational professional services firm is reeling after a former Australian tax partner consulting with the government on corporate tax avoidance legislation shared sensitive drafts with colleagues to drum up business.
On Tuesday, Treasury Secretary Steven Kennedy told lawmakers the breach was “clearly disturbing,” and the department would reconsider a PwC audit contract worth over A$1 million that expires this year.
“We’re going to very carefully consider our future procurement arrangements as they come up,” said Kennedy, whose department forwarded the broader breach to police last week.
PwC did not answer Reuters’ audit contract request.
As long as conflicts of interest were controlled, Kennedy endorsed engaging with external tax specialists.
After the PwC tax leak, Treasury officials told senators they had modified confidentiality agreements and written to PwC and 25 other firms to check if their governance mechanisms were adequate for confidential tax discussions.
On Monday, acting CEO Kristin Stubbins apologized and announced that nine unnamed partners had been ordered to take leave.
The firm did not name the dozens of personnel and many clients in a trove of emails that indicate how private versions of new guidelines were used to seek employment with U.S. technology giants, among others.
Senator Barbara Pocock told the committee PwC had not behaved in good faith during government tax negotiations.
“I see a case of aggressive harvesting of confidential information and relationships by a predatory group of tax avoiders salivating at the way in which they can make money out of these very large tax-avoiding multinational companies,” she added.
Stubbins’ Monday open letter said, “there was a culture of aggressive marketing in our tax business,” and some leaders “allowed for profit to be placed over purpose” during the tax policy leak.
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