PwC gets tough with member firms

The PricewaterhouseCoopers global network is set to receive the power to hit member firms with fines if they fail to meet the audit giant’s standards.

The firm is looking to tighten standards of service around the world, and the move is part of its overhaul which sees the firms ‘clustered’ together to ease global decision making.

‘[Previously] the network arrangements only provided for a non-compliant firm to be expelled, although of course in practice there were many intermediate steps that might be adopted. [Now] there will be very clear procedures to say what happens at each point, the processes and remedial actions,’ said UK partner Peter Wyman.

Wyman said that fines could be a part of that process, but that it was a ‘hypothetical’ question. In many cases, support might be required rather than anything else, he said.

The national member firms are set to sign up to the new standards setup, which are likely to prove as significant as the ‘cluster’ arrangements. The three groupings of national firms will enable decisions on resources to be made more quickly, but the clusters will have no legal status, secretariats, HQs or separate financial resources.

Wyman played down the idea that the moves would raise PwC’s liability risk. ‘It shouldn’t [change the situation] in a negative sense. It should improve it in a positive sense.’ He stressed that improved standards would reduce risk.

Accountancy networks have historically wasted little time in getting rid of member firms involved in major corporate frauds and other issues, but lesser problems have attracted little publicity.