Public scandals embroiling the major consulting firms are just "the tip of the iceberg", the man who lifted the lid on a major bank's poor conduct has warned.
Subscribe now for unlimited access.
or signup to continue reading
More than six months after details of embattled firm PricewaterhouseCoopers' tax breach first became public, the big four consulting firms, and others winning a share of the pie, are facing a reckoning.
A sustained spotlight on the firms threatens to reveal any mistakes and there are initials signs the federal government's promise to stamp out unnecessary consulting work is already affecting their bottom line.
Meanwhile, an effective ban on government agencies from using PwC has already resulted in the tax giant swiftly offloading its public sector consulting branch to a newly-created independent firm.
Three others, Deloitte, EY and Accenture, will appear before a Parliamentary committee on Monday to face tough questioning by senators over their millions of dollars in contracts with the government.
The four firms together raked in $813 million in government contracts over the 2022-23 financial year, according to a recent analysis by The Canberra Times.
Jeff Morris, a former Commonwealth Bank advisor who exposed corrupt practices occurring within the financial services industry, said it was only a matter of time before more scandals came to light.
Mr Morris, who worked at the major bank in its financial planning team, first went to the corporate regulator ASIC with what he perceived as widespread malpractice within the industry in 2008.
![The big four consulting firms are facing a reckoning. Pictures Shutterstock The big four consulting firms are facing a reckoning. Pictures Shutterstock](/images/transform/v1/crop/frm/rJkJNFPcdBkDQKqtkgHSjA/c3785921-4b77-4839-bc03-9afdb5d1c887.jpg/r0_0_3750_2108_w1200_h678_fmax.jpg)
An episode of ABC's Four Corners six years later showed how Mr Morris' revelations exposed the major bank was chasing profits at all costs, prompting a Senate inquiry.
A Royal Commission into the banking and financial services sectors was eventually launched in 2017 under the Turnbull government.
Mr Morris said he could see the similar sequence of events occurring with the big consultancies if the firms go under the microscope.
"If they take a really close look at these accounting firms, it's going to be an absolute bloodbath," he told The Canberra Times.
"It's just like the banks, and then the moment you took a closer look at them, they didn't scrub up too well."
The financial planner-turned-whistleblower acknowledged it took nearly a decade before a royal commission took place into what he had uncovered.
READ MORE:
But Mr Morris added future scandals involving the accounting giants could eventually prompt one.
"It's like after the first bank scandal, we had a Senate inquiry and we asked for a royal commission and we didn't get a royal commission. And somebody interviewed me and said, 'Oh, are you disappointed? Is that the end?'" Mr Morris said.
"I said, 'no, no, it's only a matter of time before there's another banking scandal'.
"And true enough, [there was] scandal after scandal for several years until we did get the royal commission."
The inquiry into the federal government's use of consultancies was triggered after reports by the Australian Financial Review revealed a senior PwC partner had leaked confidential government information to financially benefit the firm in offering insider advice to clients.
Greens senator Barbara Pocock said the committee was looking at the "integrity challenges" the firms faced being privy to sensitive government information while being for-profit entities with private sector clients.
"I think it's pretty clear to everybody that we have a problem with the consulting industry. Our job is to examine the size and scope of the problem and look at how it can be better managed going forward," the senator said on Sunday.
"This industry is a creature of our own making. The more you feed it, the bigger and more powerful it becomes.
"Over the past decade it has grown by 400 per cent. Governance, management and evaluation have not kept pace."
Mr Morris said the role of whistleblowers helped to ensure integrity across both the public and private sectors.
However, it required stronger protections for those willing to come forward to blow the whistle.
Recent amendments to federal government whistleblower protections hadn't been enough to protect disclosers from getting tied up in a complex legal and bureaucratic system.
"If you really want to put the cleaners through the consulting firms, you need to actually do something to protect whistleblowers and make sure that their information gets acted on," Mr Morris said.
"The antidote to corruption is the whistleblower."