Treasury threatens to break up the big four accounting firms as scandals mount

Treasury threatens to break up the big four accounting firms as scandals mount

A Treasury options paper has been released on the regulation of accounting, auditing and consulting firms in Australia, to address gaps in regulation of audit firms. An RMIT expert explains the impact this review might have on the professional services sector.

Professor Angel Zhong, School of Economics, Finance and Marketing:

“The Big Four have been marking their own homework for years. Treasury is finally considering taking the red pen away.

"The Treasury's options paper signals that all reform options are on the table. The breadth of the review reflects the seriousness of the concerns policymakers are seeking to address.

"The most significant proposal is the potential separation of audit and consulting activities. That would represent a fundamental change to a business model that has defined the large professional services sector for decades.

"Australia is following a broader international trend. Regulators globally are rethinking whether traditional partnership structures and self-regulatory approaches remain appropriate for firms that have become increasingly large, complex and influential.

"At the heart of this debate is an incentive problem. Firms are expected to provide independent assurance while also competing for highly profitable advisory work, and regulators are increasingly focused on how those incentives shape behaviour.

“Regulators are looking beyond individual scandals and asking whether current governance arrangements provide sufficient accountability for organisations of this size and influence.

"Trust can take years to build and only moments to lose. Once confidence in independence and integrity is damaged, rebuilding trust is often far more difficult than introducing new regulations.

"The success of any reform will ultimately be measured not by how firms are restructured, but by whether confidence in the profession and the institutions it supports is restored.”

Dr Angel Zhong is a Professor of Finance, specialising in global financial markets, behaviour and trends.

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General media enquiries: RMIT External Affairs and Media, 0439 704 077 or news@rmit.edu.au

01 July 2026

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01 July 2026

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