After major scandals involving EY, KPMG, PwC and Deloitte, Australia proposes consulting sector reforms that include stricter oversight, stronger penalties and audit changes

Australia proposes consulting sector reforms as the federal government considers sweeping regulatory changes aimed at strengthening oversight, increasing penalties for misconduct and restoring public trust following multiple scandals involving major consulting and accounting firms.

The Treasury has released a position paper outlining potential measures, including expanded powers for regulators, stricter audit rules and possible term limits for audit firms. The proposals follow recent controversies involving EY, KPMG Australia, PwC and Deloitte, all of which have intensified calls for greater accountability across the industry.

Treasury outlines stronger oversight and audit reforms

The Treasury's position paper suggests several reforms designed to improve governance and reduce conflicts of interest within Australia's consulting sector. Proposed measures include enhanced oversight by the Australian Securities and Investments Commission (ASIC), larger penalties for corporate misconduct, mandatory audit firm term limits and reducing the maximum number of partners within audit partnerships.

Assistant Treasurer Daniel Mulino said the government must strengthen regulatory arrangements after repeated cases of "dishonest, opportunistic wrongdoing" exposed across the industry. The proposals aim to address long-standing concerns over ethics, transparency and the handling of sensitive client information.

Key Highlights

  • Treasury proposes stronger consulting industry regulatory oversight measures.

  • ASIC could receive expanded enforcement and investigation powers.

  • Audit firm rotation rules may become significantly stricter.

  • Recent scandals intensified calls for major industry reforms.

  • Government seeks stronger protection for confidential client information.

Barbara Pococ, senator for the Australian Greens -

"Australians have had enough of the repeated scandals."

EY, KPMG and PwC controversies fuel reform push

The latest reform drive follows allegations that junior EY staff accessed Prime Minister Anthony Albanese's banking information while working on secondment at Commonwealth Bank before being dismissed. Albanese described the incident as deeply concerning, highlighting the importance of protecting Australians' private data.

Separately, Australia consulting sector reforms gained momentum after lawmakers questioned current and former KPMG Australia executives over allegations that confidential client information was used to secure audit contracts. KPMG has since paused bidding for new federal government work for three months while reviewing its governance and ethics framework.

The wider consulting industry regulation Australia debate also reflects earlier controversies. PwC sold its government consulting business in 2023 after confidential tax information was improperly shared with corporate clients, while Deloitte Australia faced criticism after using artificial intelligence to produce a government report containing significant errors.

Industry experts argue the recurring scandals demonstrate structural governance weaknesses rather than isolated incidents, warning that increasing AI adoption will require even stronger safeguards despite human judgment remaining the primary cause of recent failures.

Thus, Business Fortune is of the view that stronger regulatory oversight is essential to restore trust in Australia’s consulting industry.

FAQs

Why is Australia proposing consulting sector reforms?

The government aims to improve accountability after repeated misconduct involving major consulting firms.

What regulatory changes are being considered?

Proposals include stronger ASIC oversight, larger fines, stricter audit rotations and governance reforms.

Which firms have faced recent controversies?

EY, KPMG Australia, PwC and Deloitte have all been involved in separate high-profile incidents.

What sparked the latest concerns?

Recent allegations involving EY and parliamentary scrutiny of KPMG renewed calls for tougher regulation.

How could these reforms affect consulting firms?

Firms may face stricter compliance requirements, greater regulatory scrutiny and stronger penalties for misconduct.