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Canadian PwC building

PwC exam scandal further tarnishes the profession


As if bad auditing wasn't enough, PwC Canada has now been fined almost $1m for extensive exam rigging. The Imprudent Accountant explains what the latest accounting scandal means for the profession. 

28th Feb 2022
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Another week, another accountancy scandal

Sometimes you just have to despair. I can remember the time when the strongest criticism directed towards accountants was our world-beating ability to bore normal human beings into submission.

No one would have dreamt of questioning the probity or integrity of those working in an industry where ethical guidelines were paramount.

Sadly, I fear that we can no longer hold our heads up proudly, announce that we are accountants and expect to get respect from the world.

Even worse, in the good old days, the big firms led the way when it came to integrity, or that’s what everyone believed.

Now, it really is a case of one scandal after another. While KPMG has been in the firing line in the last couple of months, this week it is PwC that is desperately trying not to hit the headlines over a story that sounds more like an April Fools’ Day joke than behaviour by leaders of a highly respected profession.

Not the UK for once

In some ways, readers may diminish the import of a story that emanates from PwC in Canada, on the basis that this has little to do with those of us working on the other side of the Atlantic, even at the firm in question.

However, where practices are global or made up of affiliates, I would expect those everywhere to abide by the ethical standards that are designed to keep accountants honest.

In addition, the numbers involved in a classic tale of bad behaviour should be large enough to make those in power at the firm, both internationally and in our own country, reel.

Institutional exam cheating

Recent Big Four disasters have generally centred around poor quality work, although most readers will be well aware that KPMG managed to overstep the mark more significantly, leading to accusations of fraud and forgery, some of which appear to have been admitted and accepted.

In addition, a fine of $750,000 from US Public Company Accounting Oversight Board (PCAOB) plus a $200,000 levy by the Canadian Public Accountability Board might seem relatively modest, though not to those of us working in practices where this combination represents a good year’s turnover.

The PCAOB report on PwC exam cheating, which apparently supplemented the work of its Canadian counterpart, does not make for comfortable reading.

To compound the problem, this wasn’t a single event, but a series of rule violations and quality control lapses over several years from at least 2016 until 2020.

It involved “tests designed to help the firm’s audit professionals satisfy the requirements maintaining their accounting certifications”.

Ironically, the quality control systems that the training was designed to maintain were created to ensure that “personnel… perform all professional responsibilities with integrity.” You almost have to laugh.

Across the board

This offence didn’t take place on a minor scale either. Eleven hundred professionals from PwC Canada’s assurance practice and another 100 from elsewhere in the business were “involved in improper answer sharing – either by providing or receiving answers – in connection with tests for mandatory internal training courses”.

Just in case anyone might think that this was a few youngsters playing fast and loose, the cheats included junior staff, managers, directors and partners.


In many ways, the worst part of what is really a sorry little scam is the stupidity of the whole thing.

I can’t imagine that PwC in Canada recruits its students on a different basis from the UK or the US. They get the crème de la crème; Oxbridge graduates over here and one would imagine their Harvard or Yale equivalents in the States.

These people do not need a leg up with their exam work. They are brilliant individuals who will pass any test with flying colours in almost all cases.

However, somebody decided that this racing certainty wasn’t good enough. Instead, they have involved their firm with opprobrium worldwide, not to mention the best part of $1 million of unnecessary expenditure.

Heads should roll

I’m pleased to say that I have never seen anything of this type at any point in my career. However, if I were the head of PwC worldwide then, at the very least, I would be dismissing anybody involved in this fraudulent activity, not only the 1,200 exam cheats but administrators.

In addition, since this suggests a culture of dishonesty, I would be asking serious questions about those running the Canadian operation.

A final note

I still can’t believe that I had to write this story and originally assumed that it is a one-off that yet again shook my faith in a profession that needs to get its house in order in a hurry.

If the PwC story didn’t seem far-fetched enough already, the beleaguered KPMG, who might have been relieved to see that for once it is a rival in the mire, shouldn’t be smiling too broadly.

Both their American and Australian practices have been caught with their pants down in similar circumstances across the same period, the former getting hit for a $50 million penalty for committing offences that led the co-director of the SEC’s Enforcement Division to say “The breadth and seriousness of the misconduct at issue here is, frankly, astonishing”.

You couldn’t invent it.

Replies (12)

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By Hugo Fair
28th Feb 2022 22:04

And the saddest thing?
You really shouldn't be 'astonished' ... it is a simple insight to the moral corpusculence that runs through the core of these organisations' DNA.
They truly believe that they are too big to fail and that "only the little people" pay taxes / obey the law / go to prison ... and they appear to be right in this amoral certainty.
What the article describes probably wasn't even regarded as cheating - just 'cutting a few corners'!

Thanks (9)
By Duggimon
01st Mar 2022 11:39

I suspect the only reason this is in Canada and not the UK is that we don't have an internal examination requirement in the UK. I have no doubt whatsoever that the big four, and probably many other firms, don't want staff engaged in non-chargeable activity studying and sitting these exams and would do all they can to minimise the time required to tick the boxes, up to, including and probably exceeding just giving them the answers to re-word.

Thanks (5)
Stuart Walker Yellow Tomato Copy
By winton50
01st Mar 2022 12:06

PWC will do the maths on this.

They will weigh up the cost of the fines and minor reputational damage with the opportunity cost of 1200 people sitting exams instead of billing clients.

They will see that it is better and more profitable to cheat, and they will carry on.

The fact that all of the big firms have been caught in some form of malfeasance will simply reduce the effect of each one.

And of course, no disciplinary action will be taken by any of the associations because who wants to lose out on 1200 annual fees?

Thanks (2)
Replying to winton50:
By tedbuck
01st Mar 2022 12:25

Sadly that train of thought seems all too likely.

Really it's no different to Putin in attitude - We are big, we are important, we cannot do wrong so what we do has to be right. Same attitude but hopefully the results won't be so dire but it does exemplify the culture of big business and too much power in the wrong hands.

Very worrying for the future.

Thanks (0)
By flightdeck
01st Mar 2022 12:23

These big auditor firms just strike me as the new second hand car salesmen. I've very little respect. However I don't extrapolate that to the accountants I work with (I'm not an accountant). They're very professional.

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By RickyRoark
01st Mar 2022 12:52

The article doesn't mention the specifics of what the exams were, how PwC were cheating, etc. Merely that they were fined with a link to a supplemental report. A bit disappointing?

Thanks (3)
Replying to RickyRoark:
By User deleted
01st Mar 2022 13:40

Like a lot of internet articles. A lot of fluff and quickly written words - but no one has taken the time to really find out what happened and tell us.

That is the problem as the cost of publishing has fallen to basically nil - people publish as much stuff as they can quickly rush out, rather than publishing a few well thought out pieces.

Thanks (4)
By User deleted
01st Mar 2022 13:40

Auditors are super smart people recruited from "Oxbridge" are they?

In my experience, they tended to go into more interesting/technical fields. We had a reasonable number in my year's tax intake.

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By raju m
01st Mar 2022 14:21

I think they have a lot excuses for cheating. eg Putin, Russia, Corona, Covid,Boris and his staff party etc etc etc Raj Mehta

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By 2TunTed
01st Mar 2022 15:50

Very disappointing. What is not clear is whether this is an institutional failure -which is very serious- or the rogue actions of a few misguided individuals who may not even be members of the accounting profession which is serious enough but not damming of the firm. If the professionals involved knew that they were benefiting from improper or irregular activities, why did they not call them out?
Clobbering the firm seems like a job half done and no excuse for not taking action on the personal failure of the individuals involved.

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By User deleted
01st Mar 2022 19:17

There are a load of exam cheats listed in the CIOT disciplinaries lately. It seems to be catching. Amongst some people, at least

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By AndrewV12
04th Mar 2022 11:27

Extract above
'Heads should roll'

If every head rolled for every serious error incurred by the big 4, there would only be junior staff left, well maybe not but you can see where I am going, is nothing sacred in Accounting and Auditing.

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