Is this the beginning of the end for big consultancy firms?: RMIT experts

Mayowa Babalola, Professor, Management 

Topics: Big 4, government contracts, mismanagement, unethical practice  

“While PwC has denied any wrongdoing in the recent scandal, the RBA has made a commendable move in its recent public statement that it will not enter new contracts with PwC until the scandal's outcome.  

“The Australian public is now watching whether the government will move in this direction.  

“Undoubtedly, the Australian government needs to declare its stance on this issue publicly. By not doing so, the government will indirectly signal that such behaviors are acceptable, which is likely to have a ripple effect. 

“In moving forward, the government also needs to reconsider the overreliance on the Big 4 consulting firms for auditing and consulting services, or at the very least, have clear guidelines that inform their operations in Australia.  

“What everyone seems not to be talking about, however, is what if the unethical practices of PwC did not hit the limelight?  

“This raises an essential question: are there still other uncovered practices within PwC and other Big 4 consulting firms that can potentially raise further concerns or end their association with Australia?  

“Regardless of the outcome of the PwC scandal, there is a need for greater scrutiny and accountability when it comes to the activities of the Big 4 consulting firms.  

“The government should work to ensure that these firms are held to the highest standards of transparency and accountability and that their actions are always in the best interests of Australian taxpayers and the public at large.” 

Mayowa Babalola is a Professor of Management and internationally recognised expert in leadership and business ethics. His research program revolves around understanding how to make organisations behave more responsibly and build a more productive, ethical, and sustainable workforce. 

Dr Angel Zhong, Associate Professor, Finance 

Topics: consultancy services, conflict of interest, public sector investment 

“The PwC event is the tip of the iceberg in the increasing reliance of governments on consulting agencies.   

“For instance, in the final year of the Morisson government, audits found that $20.8 billion was spent on consulting services and outsourcing public services.  

“It is inevitable that conflicts of interest can arise within the realm of consulting, where private consulting firms advise and assist governments but also provide services to clients in the private sectors on related issues. 

“Why do governments rely on consulting firms so heavily? This practice reflects a lack of investment in the public sector.  

“There are several instances where consulting firms are hired for large contracts despite lack of expertise.  

“The return on investment and accountability of consulting firms working for governments are under close scrutiny.” 

Angel Zhong is a finance academic who specialises in empirical asset pricing, digital finance, global financial markets, investor behaviour and the recent trends in retail investing. 

Dr My Nguyen, Senior Lecturer, Finance 

Topics: finance ethics, finance integrity, public sector, consultancy firms 

“The PwC saga highlights the importance of robust internal controls and ethical standards within consultancy firms engaged in public sector work.    

 “The misuse of confidential government information for commercial gain is not only a breach of trust but also a potential threat to public interests and financial integrity.   

 “The resignation of PwC Australia chief executive in response to the scandal signals the gravity of the situation.    

 “The RBA's decision to halt new PwC contracts amidst the scandal highlights the critical need for trust and integrity in its financial activities.”   

My Nguyen is a Senior Lecturer in Finance who specialises in empirical corporate finance, banking, sustainable finance, and digital financial services.