Australia’s largest pension fund to halt new business with PwC over tax scandal

Australia’s largest superannuation fund has announced it will not sign new contracts with PwC as the consultancy grapples with the fallout from a tax scandal in one of its biggest markets.

AustralianSuper, which has almost 3 million members and has A$290 billion ($191 billion) in assets under management, said on Friday it would freeze new work with the big four firms and review its audit contract later this year.

“AustralianSuper is concerned about the ongoing revelations surrounding PwC and has, as a result, frozen all new contracts with PwC,” a fund spokesman said. AustralianSuper raised its concerns to PwC “at the highest level” last week, he added.

PwC has come under intense public scrutiny in the past month after emails emerged showing it used confidential information from the government about changes to tax laws to win new business.

It suspended nine partners this week pending the outcome of an investigation in September as it moves to mitigate the impact of the scandal that has hit its Australian and international operations.

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In one of PwC’s biggest markets, Australia, a growing number of companies are re-examining their relationship with a consultant after a breach of confidentiality.

AustralianSuper is the latest organization to impose restrictions on PwC following the scandal. The Reserve Bank of Australia said on Wednesday that it would not give the company new business pending the outcome of the review. Officials from the Ministry of Finance also said that the ethical behavior of consultants must now be taken into account when procuring new contracts.

AustralianSuper, which is part-owned by the Australian Council of Trade Unions, said it spent more than A$2 million on PwC last year.

PwC management will appear before the Senate in Canberra next week to answer questions about the scandal. The company is expected to face more pressure to disclose the names of partners involved in the use of confidential information, as well as the names of clients who received tax advice.

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The government, which referred the matter to police for consideration of criminal charges, said it was up to PwC to convince the company that an internal review and the resignation of partners involved in the scandal were sufficient remedies for it to continue working. the public sector.

Source: https://www.ft.com/content/fc5d712f-a0d7-41b9-971f-b6fb8e937605