© Reuters. FILE PHOTO: An office building with Westpac logo is seen in the Central Business District of Sydney, Australia, June 3, 2020. Picture taken June 3, 2020. REUTERS/Loren Elliott/File Photo
By Lewis Jackson
SYDNEY (Reuters) -Westpac Group, Australia’s fourth-largest bank by market capitalisation, cut ties on Wednesday with scandal-tainted auditor PricewaterhouseCoopers (PwC) Australia, ending a relationship stretching back to 1968.
The audit and consulting major, which on Wednesday announced hundreds of job cuts citing “economic headwinds”, has been under fire this year after revelations a former partner leaked government tax plans and used them to win work with global companies looking to restructure their Australian tax affairs.
Westpac, in a two-paragraph statement, did not mention the tax leak issue or give a reason for its decision to end its relationship with PwC. It said it would tender for a new external auditor as part of “best practice for audit firm rotation”.
PwC has audited Westpac since 2002, before which PwC partners and their ancestor firms had audited the bank since 1968.
Australia requires that auditors spend no more than five consecutive years out of seven on a company, though auditing firms can remain for longer periods by rotating staff involved.
However, PwC’s lead Westpac audit partner assumed the role less than two years ago, in December 2021, according to a Westpac governance statement this month.
A PwC Australia spokesperson said the firm understood the board’s decision and was proud of its time as Westpac’s auditor.
Westpac paid PwC about A$34 million ($22 million) in audit and audit-related fees in the 2023 financial year, roughly 1% of the local consultancy’s A$3.4 billion in revenue that year.
Since coming to light in January, the tax plan scandal has forced out PwC Australia’s chief executive and a string of senior partners, prompted public- and private-sector clients to freeze ties and entangled big-name customers including Alphabet (NASDAQ:)’s Google, Uber Technologies (NYSE:) and Facebook owner Meta Platforms (NASDAQ:).
PwC Australia cited economic difficulties, and the firm’s smaller size since spinning off its government consulting practice to a private equity group at the height of the scandal, in announcing hundreds of layoffs.
Renamed Scyne Advisory, roughly 1,400 of PwC Australia’s more than 9,000 staff moved over to the new firm.
The 338 roles made redundant on Wednesday made up about 4% of the some 7,600 workers left at the firm. Those laid off included dozens of staff who had offers to move across to Scyne Advisory rescinded.
($1 = 1.5555 Australian dollars)
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