WBC ASX: Westpac dumps PwC as auditor

PricewaterhouseCoopers was appointed by Westpac shareholders as auditor in 2002, and individual accountants, who were partners of PwC or its antecedent firms, have been the external auditors since 1968, the bank said.

Over the last five years, PwC has been the biggest recipient of audit and non-audit work from the major banks, raking in $700 million since the 2017 financial year.

PwC’s take of audit and non-audit work from the five largest banks rose from $98.4 million in the 2017 financial year to $136.6 million in 2022, mainly through big auditing contracts with Commonwealth Bank, Westpac and Macquarie.

The move to exclude PwC from re-tendering for its audit services comes ahead of Westpac’s annual general meeting on December 14.

Commonwealth Bank, which also uses PwC for external auditing services, faced questions at its AGM last month from shareholders concerned about its retention of the embattled firm.

CBA chairman Paul O’Malley said he had met new PwC chief executive Kevin Burrowes twice, and while the CBA board had been “concerned about developments” at PwC, it was comfortable the independent audit services it was receiving remained “first class”.

Mr O’Malley assured shareholders that “given everything that has happened [the board] have had, and will continue to have”, conversations about ongoing retention of PwC and will continue to rotate the audit partner at least every five years.

Macquarie is also audited by PwC. Macquarie’s chairman, Glenn Stevens, told shareholders in July that it would review the relationship and would “take into account the culture and [any] reputational matters” before continuing with the firm after the damaging tax leaks scandal.

Bank of Queensland is also audited by PwC. National Australia Bank is audited by EY, while ANZ Bank is audited by KPMG.

A PwC spokesman said on Wednesday morning it was “proud to have served the shareholders of Westpac Group” and that the firm understood the board’s decision.

“[PwC] will prioritise the performance of our role with commitment and diligence for our remaining term,” the spokesman said.

PwC has been embroiled in unprecedented drama this year after The Australian Financial Review revealed that a former partner shared confidential government information with other PwC personnel who then used the information to assist corporate clients with tax planning.

This triggered a range of investigations, including a broader Senate inquiry that is trawling through its fellow auditors KPMG, EY and Deloitte, as well as consultants Accenture, Boston Consulting Group and McKinsey.

Outside the banking sector, big property companies are also turning away from PwC. For example, the firm was favourite to win the external audit tender for Lendlease, but the company turned away from the firm in May as the scandal accelerated.