PwC’s offshoot Scyne Advisory will be independent from next week. Photo: David Murtagh.
PwC spinoff Scyne Advisory will begin operating independently from next week after the government gave the final green light to the consulting firm.
In the aftermath of the PricewaterhouseCoopers betrayal of Treasury confidence, the Big Four accounting firm sold off its entire government consulting arm to Allegro Funds for $1.
Allegro in turn created Scyne Advisory, which has recently been approved for operation by Foreign Investment Review Board.
The Greens, however, have managed to secure a commitment to amend existing laws and block current and former partners of the Big Four consultancies from being on the Tax Practitioners Board (TPB).
“We’re kicking the foxes out of the hen house,” Greens senator Barbara Pocock said.
“Through this amendment, we’re fixing the loophole that allowed big consultants to regulate themselves.
“Before this amendment, regulators could have direct vested interests in those entities they were meant to be regulating.
“It doesn’t pass the pub test, unsurprisingly it doesn’t work, and it’s astonishing that it was allowed to go on so long…
“Never again will we have members of the Tax Practitioners Board financially tied to those same large tax agents they are regulating.”
In further amendments, the tax advisers’ professional code of conduct will be toughened with harsher penalties for breaches.
Tax advisers will also have to report their colleagues if they know of wrongdoing, or they could be sent to jail themselves.
The TPB deregistered former PwC partner Peter-John Collins after it was revealed he had leaked confidential Treasury information (while employed at PwC) for the financial benefit of the firm and its multinational clients.
But close to half of TPB board members at the time were former Big Four partners, including two from PwC.
“Even though they recused themselves from the Collins investigation, their membership of the board could still give rise to perceptions of a conflict of interest,” Senator Pocock said.
Meanwhile, co-founder of Allegro Funds, Adrian Loader, issued a statement this week saying it was all systems go at Scyne Advisory and the sale was expected to be finalised next week.
“We’re pleased to receive the green light from the Foreign Investment Review Board for the transaction, and will now accelerate the final steps to completion,” he said.
“Scyne Advisory is ready to go. We have strong governance in place, and we are set up well for a clean transition of clients and employees.”
The Department of Finance had already given its approval for current government contracts with PwC Australia to be taken up by Scyne Advisory.
Hundreds of former PwC partners and staff are being transferred to the new entity while the firm also insists Scyne is completely independent.
All of PwC’s government work at state and Commonwealth levels is moving to Scyne.
The PwC breach of trust involved the firm helping clients to find loopholes in new tax laws it was actually helping the government to establish.
The scandal resulted in numerous parliamentary, external and internal inquiries as well as a referral to the Australian Federal Police for potential criminal prosecution.
A PwC-commissioned independent internal review was conducted by former Telstra boss Ziggy Switkowski.
His recently released report highlighted a culture inside PwC of being ruled by money and a “whatever it takes” mindset producing numerous integrity failings and leading to incidents such as the Treasury leak.
Original Article published by Chris Johnson on Riotact.
