Key facts
- Australia will enhance scrutiny of the Big Four accounting firms due to recent scandals.
- The government has directed the Australian Securities and Investments Commission (ASIC) to improve regulation.
- ASIC will examine whistleblower complaints regarding audit conduct across the sector.
- Breaking up the Big Four firms is being considered as a potential measure.
- Recent scandals involve KPMG, EY, PwC, and Deloitte.
Australia is set to intensify its oversight of the 'Big Four' accounting firms—KPMG, EY, PwC, and Deloitte—in response to a string of high-profile governance failures.
The government announced on Thursday that it has instructed the Australian Securities and Investments Commission (ASIC) to enhance the regulation, accountability, and transparency of the audit sector. While specific new regulatory steps have not yet been detailed, the government has previously proposed granting ASIC more powers and imposing stronger penalties for misconduct.
ASIC also indicated this month that it would investigate whistleblower complaints concerning audit practices across the industry, in addition to its ongoing examination of specific allegations against KPMG. The possibility of breaking up the Big Four firms is also being considered by the government.
Recent scandals have plagued all of the major accounting firms in Australia. KPMG faces accusations of staff misusing confidential information to secure contracts. Earlier, two EY employees were dismissed for allegedly accessing the prime minister's personal banking details. In 2023, PwC was implicated in sharing confidential tax policy information with clients, and Deloitte issued an apology after a report it prepared for a government department contained fabricated content generated by artificial intelligence.