US regulator investigates PwC tax leaks after ‘untimely’ report
The powerful US audit watchdog is investigating PwC Australia’s tax leaks scandal after the local firm was more than a year late in self-reporting the matter.
Jan McCahey, the local firm’s chief risk and ethics leader, told the Senate inquiry into consultants that the firm had “unfortunately” missed the statutory 30-day deadline to self-declare “reportable events” to the US Public Company Accounting Oversight Board (PCAOB).
Jan McCahey, PwC Australia’s chief risk and ethics leader, during a hearing of the Senate inquiry into consultants last week. Alex Ellinghausen
The development increases the risk to the firm’s global operations from the scandal, which stemmed from a former partner sharing confidential government information with PwC personnel. They then used it to help clients sidestep tax laws that the firm was helping Treasury develop.
The firm was first informed in February last year about the Tax Practitioners Board investigation. The TPB made its finding against the firm and the former partner in November last year. The matter was reported by The Australian Financial Review in January this year.
PwC Australia did not submit its “special report” about the “administrative or disciplinary” matter to the PCAOB until June 20, according to its public report on the regulator’s website. This is more than a year after the initial TPB alert.
“[It] was an untimely reporting in view of the difficulties that we have had,” Ms McCahey said in response to questions from Labor senator Deborah O’Neill last Thursday. “We remain in discussions with representatives of the PCAOB in relation to that.”
The PCAOB, created in 2002 by the US Congress because of the failure of self-regulation by auditors, can issue sanctions for bad
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