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FinanceAustralia plans tougher measures for Big Four accounting firms
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Australia's Federal Government has announced plans to tighten supervision of the Big Four accounting firms—KPMG, EY, Deloitte, and PwC—following a series of governance controversies. The government has directed the Australian Securities and Investments Commission (ASIC) to bolster its regulatory approach to improve accountability, transparency, and oversight of the audit sector. The move follows allegations that KPMG staff improperly used confidential information to secure contracts. ASIC will also review whistleblower reports related to audit practices and continue an existing probe into KPMG. The government is considering forcing a structural split of the Big Four companies. Each firm has faced reputational setbacks: KPMG over data misuse, EY over employees obtaining the prime minister's banking details, Deloitte over an AI-generated fabricated report, and PwC over leaking confidential tax policies in 2023.
Source report
By: Ellichipuram Umesh Source: The Accountant Reading time: 2 min
Australia's Federal Government has outlined plans to tighten supervision of the 'Big Four' accounting firms following a series of governance controversies across the sector.
The move follows allegations that KPMG staff improperly used confidential information in an effort to secure contracts.
According to a Reuters report, the government has directed the Australian Securities and Investments Commission (ASIC) to bolster its regulatory approach to accounting and audit practices. The step is aimed at improving accountability, transparency, and oversight of the audit sector.
However, the government did not reveal the specific measures it will employ.
Earlier in the month, the government floated proposals to place the major companies more directly under ASIC's authority, as well as to expand the regulator's powers and increase penalties for breaches.
ASIC separately announced this month that it will review whistleblower reports related to audit practices across the industry, while continuing an existing probe into particular claims involving KPMG.
The government has also indicated that forcing a structural split of the Big Four companies remains among the options it is weighing.
Recent Controversies
Each of the Big Four operators has faced reputational setbacks in Australia in recent years:
- KPMG: Under scrutiny over the alleged misuse of sensitive data.
- EY: Two employees were dismissed in June after allegedly obtaining the prime minister's personal banking details, according to a news agency report.
- Deloitte: Issued an apology last year after researchers found that a report it produced for a government department included AI-generated material that was fabricated.
- PwC: Severely impacted in 2023 by disclosures that it leaked confidential tax policies to secure client contracts.
"Australia plans tougher measures for Big Four accounting firms" was originally created and published by The Accountant, a GlobalData owned brand.
Source
Yahoo FinanceWestern
Part of this Story
Australia considers breaking up Big Four accounting firms after scandals