Disgraced consulting firm PwC has failed to genuinely change since it was exposed for sharing confidential government information with other clients, according to a Senate report.

The Senate Finance and Public Administration References Committee opened hearings into the management of assurance and integrity by government consulting services in May 2023.

The inquiry was sparked by the discovery that from May 2015, PwC shared confidential tax information relating to the introduction of multi-national anti-avoidance laws (MAAL) with potential and existing clients.

It’s first report PwC: A Calculated Breach of Trust, released in June 2023, addressed the 2015 breach, as well as PwC’s subsequent attempts to cover it up.

That report found PwC “engaged in a deliberate strategy over many years” to cover up its misuse of confidential information and recommended the company publish detailed information about the involvement of partners and staff in the breach, and that PwC cooperate fully with ongoing investigations.

The most recent report titled The Cover up Worsens the Crime, released last week, follows up on PwC’s progress in responding to the recommendations of the first report.

“The failure of PwC to be completely open and honest as per the committee’s recommendations in its first report is reflective of PwC’s failure to genuinely change,” it says.

“The committee does not see how PwC can recover their reputation while it continues to cover up because the two are incompatible. Indeed, the cover-up worsens the crime.”

PwC accused of hiding behind privilege

The committee, chaired by Senator Richard Colbeck also examined other documents and evidence related to the PwC matter that have come to light since June 2023, including the Switkowski Review and PwC’s response to that review, and new evidence given to the current senate inquiry.

The committee said it’s concerning that recent evidence suggests PwC planned to use the confidential information to an even greater extent than initially thought, “such as trying to influence or possibly even undermine the MAAL process itself.”

The committee also said it was disappointed at PwC’s “lack of substantive answers to questions, a failure to fully disclose important operational matters, and the failure to provide important documents.”

Commitment to change

Numerous PwC partners have been  booted out since the scandal broke, and last October the company announced it had divested itself of its government consulting business, amid apologies and commitments to change.

But the report is scathing about whether PwC has the ability, or even the will, to truly mend its ways.

“The committee has concerns about the extent to which PwC can change its structure, practices, and culture. The committee is not convinced on the evidence provided to it at this point that such substantive change is forthcoming,” the report says.

“Beyond superficial commitments to change, the committee has seen nothing of real substance yet.

“PwC have still made no genuine effort to fully investigate and address the issues. Rather their ongoing approach appears to be to hide behind legal professional privilege and hope it will all go away.”

PwC: change takes time

PwC said it was digesting the contents of the latest report.

“We have taken considerable steps to transform our firm and rebuild trust, making significant progress on our comprehensive transformation program and implementation of our Commitments to Change,” a spokesperson said.

“These include: the endorsement of a major governance reform package which will see PwC become the first of the big four firms in Australia to have an independent Chair of its Board; an improved enterprise-wide risk management function; and the implementation of cultural change from the top down.”

The spokesperson said meaningful change takes time and PwC will continue to cooperate with the Senate and regulators in an effort to bring transformative structural change to the firm and the industry.

The committee’s final report is due to be tabled at the end of May.

AFP investigations into the breach are ongoing.

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