Government response sidesteps partnership caps, protected titles
The Institute of Public Accountants has criticised the federal government's February 2026 response to the Parliamentary Joint Committee's ethics inquiry, arguing it fails to address misconduct where it actually occurred.
The PJC delivered 40 recommendations in November 2024 following the PwC tax scandal, including capping accounting partnerships at 400 partners (to match legal firms), protecting the term "accountant", and introducing suitable penalties for misconduct. The government noted these recommendations rather than accepting them outright.
Small firms carry the compliance load
IPA chief executive Andrew Conway said tax agents now face eight new Code requirements, including obligations to report client conduct to the ATO. "Small practitioners are carrying a disproportionate regulatory load, with no corresponding action to address misconduct where it actually occurred," he said.
The timing matters. The Big Four collectively audit 193 of Australia's top 200 companies. The PJC held 12 public hearings and reviewed 83 submissions before recommending structural reforms including mandatory 10-year audit tenders for listed companies and publication of individual audit firm reports by ASIC.
What was recommended vs what landed
The PJC's priority recommendations included:
- Partnership size limits (400 partners maximum)
- Protected definition of "accountant"
- Consultancy code with registration requirements
- Stronger whistleblower protections
- Penalty regime calibrated to misconduct severity
Coalition members dissented on the partnership cap and ban on non-audit services, citing practical challenges. PwC Australia committed to publishing audited financial statements by 2025 and appointing non-executive directors, though the firm pushed back on structure-specific targeting.
The Department of Finance separately barred PwC from government tenders until investigations conclude. That process included 12 additional recommendations.
Exposure draft legislation combining the Australian Accounting Standards Board and related bodies was released in October 2025. The IPA continues to push for reconsideration of the PJC's original recommendations, particularly those targeting large partnerships rather than small practitioners.