Scandal after scandal: What is happening at PwC?
Over the last few years, the Big Four giant PwC has been involved in a number of scandals across various continents. It’s battling to prevent more from popping up as it tries to repair its reputation.
PwC operates as a global network composed of independent member firms operating under one brand, and is present in over 130 countries.
The firm’s name echoed around global media outlets two years ago after a massive scandal broke out down under.
Its Australian arm was at the heart of the scandal, following revelations that leaked government tax plans were used to win work from companies looking to restructure their Australian tax affairs.
As a result, the firm had to sell its government consulting business for just A$1, hundreds of jobs were cut, and senior leaders, including chief executive Tom Seymour, resigned, prompting a national inquiry.
PwC’s global bosses had to step in to replace local leaders.
The tax scandal cost the Australian arm in both reputation and financial as its revenue dropped by over 26 per cent to $2.5bn in the 2024 financial year. Meanwhile, PwC was suspended from bidding on and receiving government contracts in Australia.
There was a refresh of the global leadership in October 2023 as Bob Moritz, who had held the post of global chair since 2016 was set to retire, the firm appointed Mohamed Kande.
Kande’s first day of his four-year term was 1 July, two months before the next scandal broke out.
Asia
In September 2024, China issued a shocking decision to ban PwC’s Chinese auditing business and fine the firm $62m (£46.6m).
The Chinese authorities suspended PwC ZhongTian for six months and fined it $62m for allegedly helping to cover up fraud at property developer Evergrande.
The property giant had collapsed the year prior with over $300bn in debt.
The liquidators of Evergrande filed a lawsuit against PwC in Hong Kong, seeking damages for alleged negligence and misrepresentation in the auditing.
The Financial Times reported in February that 66 people, including dozens of partners, left the firm’s mainland Chinese arm following its ban.
A spokesperson for the firm told the press at the time that “over the past several months, PwC China has been reshaping its business to continue our focus on delivering the best quality services for our clients.”
“As we have gone through this process, some partners have retired from the firm,” the spokesperson added.
Middle East
Its global battles expanded into the Middle East as Saudi Arabia’s Public Investment Fund (PIF) revealed it temporarily banned PwC last month.
Due to a client-specific issue, the firm was banned from new advisory and consulting contracts until February 2026.
Its auditing services are unaffected by the suspension.
The firm was one of the consultants on Neom, the $500bn planned city along the Red Sea coast.
The details of why Pwc was banned were not disclosed. However, the FT reported that its attempt to hire Neom’s chief internal audit officer, Jason Davies, upset PIF.
With billions of dollars at stake, the firm is trying to amend its relationship with Saudi Arabia’s leading funder of its Vision 2030 agenda.
Africa
PwC is wary of being named in further scandals. As a result, it has gone on a cutting spree, closing ties with several firms in Africa deemed to be risky or unprofitable.
In a statement issued at the end of March, PwC said that following a “strategic review,” its arms in Côte d’Ivoire, Gabon, Cameroon, the Democratic Republic of Congo, the Republic of Congo, Madagascar, the Republic of Guinea, Senegal, and Equatorial Guinea were no longer part of the PwC network.
The firm added it will “maintain a strong presence in Africa and has service continuity plans in place for our clients from other PwC offices across the region, as applicable.”
However, the FT reported that the global arm was dropping smaller member firms that could expose it to reputational risk or did not have the scale to make the required investments in compliance systems.
It was also reported that the global arm cut ties with its firms in Zimbabwe, Malawi, and Fiji just months beforehand. These countries, along with the Sub-Saharan Francophone Africa firms, are no longer on the PwC Global website, bringing its global reach from more than 150 to around 130 countries.
Back at home in the UK arm, PwC, like the rest of the Big Four giants, has faced several fines by the accountancy regulator over the last few years.
According to figures seen by CityAM, the Big Four were hit over £154m (pre-discount) in fines over the last five years, and of that, PwC had eight fines totalling over £34.7m (pre-discount).
PwC was contacted for a comment but declined.