Macquarie to consider PwC reputation in audit review

afr.com:

Macquarie will consider PwC’s culture and reputation issues as it reviews whether to change its long-time auditor, the company has told shareholders.

PwC has been Macquarie’s auditor since 1993, and was paid more than $79 million this year. Macquarie had previously flagged that it would review those arrangements – before The Australian Financial Review first reported that one of PwC’s former partners had shared secret government information that the firm used to advise clients on how to sidestep new tax laws.

Macquarie chair Glenn Stevens (left), company secretary Simone Kovacic, chief executive Shemara Wikramanayake and chief financial officer Alex Harvey at the group’s AGM in Sydney. Dominic Lorrimer

But, speaking to shareholders on Thursday, Macquarie chairman Glenn Stevens said the review would be “a comprehensive review that will take into account the culture and [any] reputational matters”.

Since the tax scandal was first disclosed, the Reserve Bank, AustralianSuper and the Australian Retirement Trust have said they would reconsider using PwC for new work, while Lendlease has removed the firm from a panel of companies it was considering for its audit contract.

While PwC will audit Macquarie’s accounts for this financial year, losing the investment bank as a client in future would deal a blow to the under-fire firm.

PwC pocketed about $79.3 million from Macquarie in exchange for auditing and other audit-related services in the year to the end of March. About $53 million of that went to PwC Australia.

A year earlier, Macquarie paid it $60.4 million for its services, of which more than half was allocated to the consultant’s Australian arm.

Macquarie has appointed PwC partner Voula Papageorgiou as its lead auditor for