Westpac, Australia’s fourth-largest bank by market capitalization, has cut ties with auditor PricewaterhouseCoopers (PwC) Australia, ending a relationship that spanned over five decades. The decision comes amidst a scandal involving a former PwC partner leaking government tax plans and using them to secure work with global companies seeking to restructure their Australian tax affairs.
Although Westpac did not explicitly mention the tax leak issue as the reason for the termination, it stated that it would seek a new external auditor as part of best practice for audit firm rotation. PwC has been auditing Westpac since 2002, and its predecessor firms have been involved with the bank since 1968.
Australia’s regulations require auditors to spend no more than five consecutive years out of seven on a company, with the possibility of longer periods through staff rotation. However, PwC’s lead partner responsible for auditing Westpac took on the role less than two years ago, in December 2021.
Westpac paid approximately A$34 million ($22 million) to PwC in audit and audit-related fees during the 2023 financial year. This accounted for around 1% of PwC Australia’s A$3.4 billion revenue that year.
Since the tax plan scandal emerged in January, PwC Australia has witnessed the exit of its chief executive and several senior partners. The firm has faced client freezes from both public and private-sector entities and has affected well-known customers such as Google, Uber, and Meta Platforms (formerly Facebook).
Due to ongoing economic challenges and the firm’s reduced size following the separation of its government consulting practice, PwC Australia has announced several layoffs. Renamed Scyne Advisory, the firm now employs approximately 7,600 workers, with 338 roles made redundant recently.
Westpac’s decision to sever ties with PwC highlights the wider repercussions of the tax plan scandal, which have had far-reaching consequences for the auditing giant. As investigations into the leak continue and affected companies reassess their relationships, the fallout from this scandal continues to unfold.
