Embattled consultancy firm PwC has admitted to another serious conflict of interest breach, but has clarified that it did not involve the misuse of government information.
The breach occurred in 2018 and is separate to the misuse of confidential tax policy information that has triggered a reputation crisis for the firm and seen the divestment of its government services division for just $1.
This breach involved a PwC staff member entering into an exclusivity agreement with a client without proper authorisation from the firm’s conflict of interests team.
It was revealed in response to questions from Greens senator Barbara Pocock, who asked PwC to detail “how many disciplinary actions have been taken in relation to conflicts of interest and/or the misuse of government information in the past five years?”.
In response, PwC told the Senate that it was aware “the firm had taken action in relation to two matters involving conflicts of interest and/or the misuse of government information in the past five years, including the Tax Practitioners Board matter in which disciplinary action was taken this year”.
“The other matter occurred in 2018”.
When asked to provide more detail, a PwC spokesperson told Guardian Australia “there is no second misuse of information breach”.
“PwC, like other firms, was asked about disciplinary actions and PwC confirmed it had taken discipline against a partner over an internal process oversight where the partner did not obtain approval for an exclusivity undertaking in an engagement,” the spokesperson said.
The partner involved received a financial penalty and was not fired.
Details about the 2018 matter were not addressed during previous parliamentary inquiries and are likely to prompt more scrutiny and criticism of the firm, which initially sought to downplay the seriousness of the scandal.
PwC has also provided more information about other scandals within the firm, including multiple sackings after a racist trivia event and a separate, additional breach of standards by Canberra-based partners.
“In September 2021, allegations of racism were made against two employees who were hosting an online team trivia event,” the PwC submission said. “Issues were also raised that other people in attendance at the online event, including partners, did not speak up or raise concerns.”
The event was investigated by an external law firm and prompted a cultural overhaul to create a “more inclusive and fairer PwC”.
“The panel made findings that resulted in the termination of two employees, financial penalties for three partners and formal warnings for 13 partners who were either in leadership positions in the team that ran the event, managed the employees who were terminated or who attended the event,” the submission said.
The firm also revealed an investigation was launched after a former employee accused a partner in the financial advisory team of breaching behaviour standards. The specific allegation and the date are not disclosed.
“These allegations were investigated and the facts lead to a broader group of employees in the same financial advisory team being investigated for their conduct,” the PwC submission said.
“[It was] determined that the partner was to be mandatorily retired and three employees had their employment terminated as a result of their breaches of the code of conduct.”
