Australia considers tougher oversight and possible break up of ‘Big Four’

Australia is weighing a broad overhaul of its accounting industry after scandals involving the Big Four firms (Deloitte, EY, KPMG and PwC). Treasury options include splitting audit and consulting businesses, moving the firms under the corporate regulator, cutting maximum partnership size to 400 from 1,000, and mandating audit practice rotation. The review follows the 2023 PwC tax leaks scandal and new scrutiny of KPMG, highlighting weaknesses in the current framework and raising trust concerns. While the proposals are aimed at governance and market integrity rather than direct earnings, they could materially affect the operating models, compliance costs and revenue mix of Australia’s largest professional-services firms if adopted.