PwC Faces Scrutiny Over Early Monitoring Exit

PwC is pushing to end external oversight of its governance reforms eight months ahead of schedule, aiming to show progress with internal changes, but the timing risks deepening public mistrust in the firm’s accountability.

The audit and consulting giant has been under intense scrutiny since a widespread tax scandal revealed serious breaches of ethical standards. In response, PwC commissioned internal reviews and pledged structural reform. Oversight was introduced to monitor progress, but that monitoring now looks set to wrap up before key actions, like restructuring its board to include a majority of independent non-executives, are finished.

PwC hired a law firm to assess its reform implementation and the report they delivered is labelled “independent.” However, critics are questioning the legitimacy of these assessments, given they’re funded and directed by PwC itself. While the firm claims improvements in governance and board strength, many believe these reviews are more about managing image than restoring integrity.

This move seems to reflect a pattern - PwC controlling the narrative through self-funded validations rather than embracing transparency. Though international oversight remains in place, calls are intensifying for regulators and parliament, not the firm itself, to determine when trust has been rebuilt.

The broader issue extends beyond PwC. A parliamentary report identified systemic flaws across the industry, including conflicts of interest, weak ethical standards and gaps in regulation. Now, 40 policy recommendations are in play to address these issues, such as clearer rules on governance, better protections for whistleblowers and a mandatory code of conduct for consultants.

Real reform appears to finally be gaining traction, powered by government focus and parliamentary pressure. But as scrutiny ramps up across the sector, PwC’s quick move to declare “mission accomplished” may prove to be premature and could spark further calls to take reform oversight out of the hands of those being reformed.

Source: Australian Financial Review, PwC, Bloomberg Tax, Capital Brief