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Published : 01 Jul 2026, 10:28 AM
The Australian government said on Wednesday it was considering breaking up the Big Four accounting firms and bringing them under the corporate regulator's purview following some high-profile scandals in the sector.
The proposals, outlined in a paper from the Treasury department, also include caps on the size of partnerships to 400 from 1,000.
The paper said the recent conduct of the Big Four accounting firms — Deloitte, EY, KPMG and PwC — had exposed gaps in Australia's regulatory framework. It drew comparisons with the way they are regulated in Britain and the United States.
"In recent years, we have seen behaviour from some large accounting, auditing and consulting firms in Australia that is not fair and honest," Assistant Treasurer Daniel Mulino said in a statement.
"This has undermined trust in the firms themselves and raised broader questions about the resilience of the frameworks meant to uphold market integrity."
The potential interventions broadly mirror those recommended by parliamentary inquiries triggered by the PwC tax leaks scandal in 2023, in which confidential government policy was shared to win clients. Most of those recommendations have yet to be implemented.
KPMG is also currently embroiled in a scandal over whistleblower allegations it shared confidential company information with prospective private-sector clients to bid for auditing work.
"We welcome the release of the options paper by Treasury and the opportunity to engage constructively on any measures which strengthen trust in the profession," a Deloitte spokesperson said.
EY Oceania CEO David Larocca said in a statement that the firm was supportive of many of the options outlined in the paper.
A PwC spokesperson said the paper was an "important opportunity to contribute to strengthening and rebuilding trust in our industry".
"Our firm has undergone significant transformation across the past few years, and that work continues."
KPMG did not immediately respond to an emailed request for comment.
STRUCTURAL OR OPERATIONAL SEPARATION?
The Big Four in Australia are regulated as partnerships instead of companies. That means they are not subject to supervision by the Australian Securities and Investments Commission, which has strict reporting requirements. Instead they are regulated by state-based laws.
"There's a question over whether ASIC needs to step in more as the federal regulator," Mulino told ABC Radio.
Mulino said among the strongest options under consideration is structural separation, forcing the firms to split their audit and consulting arms.
An alternative would involve operational separation, preventing firms from offering both audit and non-audit services to the same client.
The government will also examine whether to reduce the current cap of 1,000 partners in accounting firms, aligning it more closely with the 400-partner limit seen in other professional services sectors such as law.
Barbara Pocock, a Greens senator who has campaigned for tougher regulation of the sector, said the Labor government already knew what the solutions were from its previous inquiries, and called for urgent action.
"Labor needs to put an end to the Big Four's special treatment and regulate them like other Australian businesses," she said in a statement.
Consultation on the proposals closes on Aug 12.
