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· Posted on
February 21, 2024

The Senate's new show: 'How I Met Your Auditor' as it delves into the secrets within the walls of the Big 4

The leaders of PwC, KPMG, EY and Deloitte are all in the spotlight as they’re facing a Senate inquiry into the professional services sector.

What's the key learning?

  • A former partner at KPMG and whistleblower has said that the big four used the "bastardisation of the partnership model", which was used to create a "risk-free, tax-free, and consequence-free model."
  • In a company, there is a CEO, a board and shareholders - but in partnerships, the company is owned by a group of people who are called "partners".
  • What's most interesting is the idea that a partnership structure has less accountability than a company.

👉 Background: The PwC partner leaking sensitive government tax information has been discussed at length over the past couple of months.

👉 What happened: But now, as a result of this leak, the leaders of PwC, KPMG, EY and Deloitte are all in the spotlight as they’re facing a Senate inquiry into the professional services sector.

👉 What else: As part of this inquiry, a former partner at KPMG and whistleblower has said that the big four used the "bastardisation of the partnership model". And this "bastardisation" was used to create a "risk-free, tax-free, and consequence-free model." Yikesss.

What's the key learning?

💡Partnership vs company... same same, but very different. When you think of a company, you think of the big fish like Telstra or Mars. There is a CEO, a board and shareholders.

💡But in partnerships, the company is owned by a group of people who are called "partners". Sometimes, there is a partnership for the audit division, the consulting division and accounting division - all of which are connected by the single brand name.

💡In a partnership, each partner is personally liable for the business' debts. But what's most interesting is the idea that a partnership structure has less accountability than a company... or so it's been alleged more recently.

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