What is the PwC scandal? Explained simply.

What is the PwC scandal? It's resulted in a criminal investigation, and claimed the scalp of its CEO. Here are the details, explained simply
What is the PwC scandal

PricewaterhouseCoopers (PwC) is at the centre of a scandal following allegations one of its key leaders used confidential government information to help clients avoid tax.

The Australian Federal Police (AFP) has now launched a criminal investigation. It’s specifically focusing on the sharing of confidential information by Peter Collins, the former Head of International Tax at PwC.

First, what is PwC?

PwC is one of the biggest accounting firms in the world, employing nearly 330,000 people worldwide. They made about $AU77 billion in gross revenue in the last financial year and have nine offices in Australia.

PwC Australia is led by a Board of Partners that consists of the CEO and a group of elected partners.

What is the PwC scandal?

The scandal dates back to 2014. This is when PwC’s Head of International Tax Peter Collins was advising the government on how to stop big multinational companies from dodging tax.

Collins signed confidentiality agreements on multiple occasions over a few years to carry out his work.

It’s since been alleged that Collins shared this confidential information with some of his colleagues, who then leaked it to PwC clients. This was done to help the corporations avoid the new rules (meaning they would have been able to dodge tax even further).

Internal communications found that Collins knew the confidential information would be used to benefit their clients.

The fallout

Collins was deregistered as a tax agent for two years following an investigation of these allegations last year. 

The Tax Practitioners Board tabled evidence in Parliament about the “significant extent” of misconduct earlier this month. They confirmed there was a “wide range of individuals within PwC” who had accessed the confidential information.

PwC CEO Tom Seymour stepped down from his position a few days later, effective immediately.

PwC announced it would conduct an independent review of its culture, accountability, and governance soon after Seymour’s resignation.

The AFP announced it had commenced a criminal investigation into the matter this week after it was asked to by the Treasury.

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