Australia and New Zealand put new pressure on the Big Four
Big Four accounting is facing significant challenges in Oceania that stem from both policy and people.
Australian regulators are considering sweeping reforms after a series of misconduct scandals involving major accounting firms. And, at the same time, Deloitte’s latest workforce survey in New Zealand suggests younger professionals are becoming more selective about the careers they pursue and the trade-offs they are willing to make.
The developments underscore two issues the firms will need to quickly navigate simultaneously across the region: Rebuilding confidence with regulators while convincing the next generation that a career in public accounting remains an attractive choice.
Australia considers sweeping reforms for the Big Four
Australia’s government is considering some of the most significant changes to the accounting profession in decades following a series of misconduct scandals involving the Big Four.
Last week, the Australian Securities and Investments Commission said it would review internal and whistleblower complaints involving audit conduct at PwC, Deloitte, EY and KPMG. The review will examine allegations involving the misuse or sharing of confidential information while ASIC continues a separate investigation into claims that KPMG Australia employees improperly used confidential client information to pursue new business.
The latest review builds on the fallout from the PwC Australia tax leaks scandal, which emerged in 2023 after former tax partner Peter-John Collins disclosed confidential government information obtained while advising Australia’s Treasury on new multinational tax avoidance laws. Internal emails later showed the information had been circulated within PwC before the legislation became public, allowing partners to market advice to prospective clients before the rules took effect.
The scrutiny has continued to widen. Earlier this year, KPMG Australia, which recently announced major job cuts among staff and partners, disclosed that more than two dozen employees, including a partner who was fined 10,000 Austrailian dollars, had used AI to cheat on internal training exams. The firm has also been engulfed by allegations that it misused confidential client information to pursue audit and consulting work, prompting the departures of KPMG Australia CEO Andrew Yates and Chief Operating Officer Eileen Hoggett, the latter of whom remains on as a partner with the firm, from their executive roles.
Separately, ASIC is investigating allegations involving KPMG’s handling of confidential client information and its whistleblower process. At EY Australia, an employee was dismissed after allegedly accessing the bank account information of Australian Prime Minister Anthony Albanese, his wife and an EY partner while working on an audit engagement for Commonwealth Bank.
The accumulation of scandals has prompted Australia’s Treasury to reconsider how the country’s largest accounting firms are regulated. In the options paper released this month, the Treasury wrote that “we have seen behaviour from large accounting, auditing, and consulting firms in Australia that is not fair and honest,” adding that the conduct “has undermined trust in the firms themselves and raised broader questions about the resilience of the frameworks meant to uphold market integrity.”
The Treasury also said feedback from stakeholders and recent events had confirmed that “gaps exist in the regulation of the audit sector in relation to independence and ethics, audit firm culture and values, firm-wide monitoring systems and internal controls, and prioritisation of audit quality.”
The paper outlines several options to address those concerns, including separating audit and consulting businesses, expanding ASIC’s authority over partnership-based firms, strengthening governance requirements and introducing mandatory tendering of audit engagements every 10 years. Among the most significant proposals is mandatory audit firm rotation after 20 years.
That would represent a notable departure from the standard in the U.S. The Sarbanes-Oxley Act requires public companies to rotate their lead audit partners every five years to help preserve auditor independence, but it does not require companies to replace their audit firm at any point whatsoever. Australia’s proposal would instead require companies to eventually appoint a new firm entirely.
As regulators debate whether the Big Four’s structure and oversight should change, the firms are also confronting another long-term challenge: attracting and retaining the next generation of accountants, many of whom are rethinking what they want from a career in public accounting.
New Zealand survey points to changing career expectations
Across the Tasman Sea, Australia’s closest economic neighbor is highlighting another challenge for the Big Four: attracting the next generation of accountants.
The latest Deloitte Gen Z and Millennial Survey suggests many younger professionals are redefining what career success looks like. Although 77% of Gen Z respondents and 76% of millennials said they would like to hold leadership positions at some point, only 8% of Gen Zs and 6% of millennials identified reaching leadership as their primary career goal.
For Gen Z respondents, financial independence and job security ranked among the most important career priorities. Millennials were more likely to point to maintaining a healthy work-life balance. Higher compensation would make leadership roles more attractive, respondents unsurpisingly said, along with greater workplace flexibility and a clearer understanding of how to advance.
That mindset stands in contrast to the career model that has defined public accounting for decades. The Big Four have traditionally offered young accountants intensive training and broad exposure to clients, while expecting them to navigate demanding busy seasons and long hours early in their careers. Partnership has remained the ultimate prize for some, while many others have leveraged the experience into finance leadership roles in industry.
Those trade-offs may be getting harder to justify. In New Zealand, 64% of Gen Z respondents and 67% of millennials said financial pressures had already caused them to delay major life decisions, both well above the global averages. Housing affordability also shaped career choices, with roughly seven in 10 respondents saying it influences where they work.
Workplace culture appears to matter just as much, too. More than four in 10 Gen Z respondents said they feel stressed all or most of the time, compared with about one-third of millennials. Long hours and not having enough time to complete work were among the leading workplace stressors identified in the survey. Nearly every respondent also said having a sense of purpose is important to job satisfaction.
Deloitte New Zealand Partner Lauren Foster suggested the findings indicate that younger professionals are still interested in leadership but are becoming more deliberate about the path to get there. “Leadership remains attractive, but younger New Zealanders are looking closely at the trade-offs,” Foster said. “Employers that want to build future leadership pipelines will need to make leadership roles more sustainable, better supported and more clearly connected to development.”
Australia’s regulatory push and Deloitte’s workforce data point to a profession at a crossroads of human capital management. The Big Four have long relied on demanding early-career experiences, with the promise of partnership or attractive opportunities in industry serving as the payoff. Deloitte’s findings suggest younger professionals are increasingly reevaluating that bargain, a shift that could prove just as consequential for the profession across the globe as the regulatory scrutiny unfolding in Australia.
