| | | Deloitte admits wrongdoing, widening scandal's grip on consultancy firms
Canberra, AustraliaEdited By: Hardik BhardwajUpdated: Jul 14, 2023, 12:21 PM IST
Deloitte layoffs: The Deloitte Company logo is seen on a commercial tower in Gurugram near New Delhi, India Photograph:(Reuters)
Deloitte, one of the world's largest consultancy firms, has acknowledged the misuse of government information, further widening the scandal that has recently engulfed fellow big four firm PwC. The disclosure came as part of an ongoing Senate inquiry, although Deloitte has been reluctant to provide specific details due to client confidentiality.
Deloitte, one of the world's largest consultancy firms, has acknowledged the misuse of government information, further widening the scandal that has recently engulfed fellow big four firm PwC. The disclosure came as part of an ongoing Senate inquiry, although Deloitte has been reluctant to provide specific details due to client confidentiality.
The accounting firm revealed that the Home Affairs Department dropped it after failing to disclose a conflict of interest, similar to a breach identified during its work with the Australian National Audit Office (ANAO). PwC, on the other hand, has been embroiled in a reputation crisis, resulting in dismissals, parliamentary inquiries, police referrals, and the divestment of its government services division for a mere $1 following its misuse of confidential tax policy information.
When approached for a comment on the misuse of government information, Deloitte declined to respond directly but assured the Senate inquiry that it takes its obligations seriously. The firm stated that any instances of confidential government information misuse would be investigated according to their standard procedures. The consequences would vary depending on the internal investigation findings, potentially including disciplinary actions against both partners and employees, in line with their policies addressing misconduct.
The Guardian cited Senator Barbara Pocock of the Greens party, who asserted that Deloitte's disclosure confirmed that the misuse of government information by consultants extends beyond the PwC tax scandal. She expressed concerns that the revelations thus far are only the tip of the iceberg.
Dr. Andy Schmulow, an associate professor of law at the University of Wollongong, told The Guardian that the disclosed breaches expose wider structural issues in the industry that must be addressed. "What this demonstrates is that the system itself is so dysfunctional … that it is no longer possible, even in theory, to uphold the public good," Dr Schmulow told the UK publication.
In addition to the misuse of government information, Deloitte also confirmed nine instances of misusing confidential or proprietary information during the previous fiscal year. However, specific details regarding these incidents were not provided to the Senate, leaving room for potential further investigations.
Deloitte did disclose two instances of conflict of interest breaches related to government contracts. In one case, Deloitte audited the environmental, social, and governance data of a government agency while simultaneously auditing its financial statements without seeking pre-approval from the ANAO as required by their independence and conflict management policies. The second breach involved the Home Affairs Department terminating a contract after an investigation revealed an undisclosed organizational conflict of interest.
Deloitte informed the Senate that it was unaware of any other significant conflict of interest matters concerning government work. Still, it declined to share details about its partnership structure, citing the document's sensitivity and potential impact on commercial advantage and partnership integrity. PwC, in contrast, provided a copy of its partnership agreement to the Senate but requested that it remain confidential among committee members.
Earlier this week, PwC admitted to another serious conflict of interest breach; however, it clarified that it did not involve the misuse of government information.
(With Inputs from Agencies)
Hardik Bhardwaj |
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