The six to eight partners who shared the emails have apparently now all gone, but this scandal is far from over.
If those running PwC believe that undertaking some kind of internal investigation into the culture of the organisation is enough of a get out of jail free card, it is woefully mistaken.
It is hard to see how the firm is now qualified to undertake such introspection.
Relationships between client and adviser are built on trust – which once broken is tremendously difficult to restore. The external push for accountability and payback has picked up a lot of momentum.
It has bled into the broader industry and spurned a larger Senate inquiry into the conflicts of interest between the governments and the big four accounting firms that provide it with expert advice.
Politicians (particularly the Greens) are placing PwC in the middle of their dartboards – and getting plenty of publicity mileage while the demoted Seymour is handing out profuse apologies.
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But this is a side-show.
The PwC debacle raises questions about the use of private accounting firms to help formulate tax laws, when they are also serving their clients’ interests by ensuring they pay as little tax as is legally required.
This model is intrinsically flawed. It is the equivalent of having the same adviser on both sides of a takeover bid – acting for the bidder and for the defence.
From the government’s perspective, the use of these firms has always come with risk, but one which successive governments have been willing to take because these firms employ the best of the best. Who better to advise on the tax framework than the experts from the top accounting firms?
But these big accounting firms that have lucrative government work need to pick a side.
PwC in this instance thought it could play both sides. And it’s a decision for which it will pay dearly.
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