Australia may tighten rules on professional services

Significance

This was prompted by last year’s scandal involving leaked details of public tax reforms by PwC. Recommendations from the Treasury and the Senate would compel the ‘Big Four’ accounting firms to split their consultancy and auditing units, and possibly subject partnerships to similar levels of regulatory scrutiny as other corporate structures.

Impacts

• The public sector lacks the capacity to end its reliance on outside consultants, including the Big Four firms.
• Political interests may weaken the impact of reforms before legislation is submitted later this year.
• Privacy issues are likely to frustrate efforts to boost regulatory transparency.