How the Big 4 Audit and Consultancy Firms Infiltrated Governments (in Australia) and took home 10 billion – Youtube Video
As a former senior manager at PwC LLP in Vancouver, I share the concerns raised in the video. A few months ago, I resigned from CPA BC, over ethical concerns regarding my provincial association and the publishing of inflated claims of members’ incomes. This was done in an obvious attempt to attract new members. I believe this is a clear violation of Rule 205 of our code of ethics.
Misrepresenting financial information to encourage investment violates the most important ethical responsibility of the profession. It is the basis upon which the profession has obtained monopolies from governments worldwide.
Since 2014, when the legacy accounting bodies amalgamated in Canada, various initiatives have been introduced. These work together to ensure the dominance of these same four companies.
(If you don’t have time to view the video (about 17 minutes) – we used WORDTUNE AI to produce a summary…)
“I really do see these Consultants as an infestation” – Abigail Boyd (NSW Greens MP)
How four companies infiltrated governments and took home $10 billion | 7.30
The Big Four started as old world accountancy firms auditing the financial accounts of powerful multinational corporations and the Rich and Famous. They now advise corporations on strategy.
The Big Four set themselves up as so-called independent experts and managed to avoid serious scrutiny until recently.
Brendan Lion joined KPMG as a partner in 2018 but was dumped in 2021 after refusing to change a report that concluded the New South Wales government had artificially inflated the state budget.
Lion was ostracized and humiliated in front of external stakeholders and clients but was later vindicated by the New South Wales Auditor General.
KPMG fostered a high-octane sales culture that crushed anyone who got in the way.
Labor Senator Deborah O’Neill is taking on the Big Four accounting firms for using confidential information to help clients sidestep tax laws.
PwC’s monetizing of information that belonged to the Australian people is shameful and international at scale. Thankfully someone is finally ready to take them on.
The Big Four have built a business that thrives on conflicts of interest. We asked Brendan to explain how the model works from the inside.
Australia relies on the Big Four to be the independent, trusted Auditors for government and companies. The reality is that they are dependent on consulting cash, and that erodes their independence.
The conflicts between the Big Four and government departments have raised concerns about the growing influence of these companies.
Putting an accurate figure on how much public money is spent on consulting firms is impossible because states and federal governments only have to disclose contracts worth more than four hundred thousand dollars. ABC’s 730 can reveal that at least 10 billion dollars have been spent on the Big Four firms.
Catherine Williams has been trawling through government data and identified so-called Management Advisory Services as the most opaque of all. She believes that this use of public money has contributed to the hollowing out of the public service.
I really do see Consultants as an infestation in government departments. The system by which we are recording how much we’re spending on consultants is deeply flawed, and the New South Wales government needs to tell us how much is being spent.
Boyd says consultants are being paid huge amounts of money to rewrite business plans for departments, and that this is a huge waste of public money.
Government departments increasingly rely on the Big Four and major Global Consultants to provide independent thought about how to meet outcomes. Instead they provide a veneer of credibility, and someone to blame for really bad public policy decisions.
We asked the Big Four to sit down for an interview, but they declined. PwC said it was taking steps to enhance its governance, culture and accountability.
The Big Four have no law to follow, no one audits them, and they don’t even have to pay corporate tax. It looks like they are operating in a gray area beyond the law, without active regulation, and with no real consequence for any individual bad act.
The Big Four built their reputation as auditors, but even that slipped. The corporate regulator found glaring failures in some of their audit work, and the calls are getting louder to reform the system so it never happens again.