The Big Four accounting firms are facing severe challenges in Oceania from both policy and talent dimensions. Australian regulators are considering comprehensive reforms after multiple large accounting firms were embroiled in misconduct scandals; meanwhile, Deloitte's latest workforce survey in New Zealand shows that young professionals are becoming more cautious about career choices and the trade-offs they are willing to make.

These developments highlight two major issues the Big Four need to address simultaneously in the region: rebuilding trust with regulators on one hand, and convincing the next generation of talent that the public accounting industry remains an attractive career choice on the other.

Australia mulls sweeping reforms for Big Four

After the Big Four accounting firms were successively embroiled in misconduct scandals, the Australian government is considering implementing the most significant changes to the accounting industry in decades. Last week, the Australian Securities and Investments Commission (ASIC) stated it would review internal and whistleblower complaints involving audit conduct at PwC, Deloitte, EY, and KPMG. The review will investigate allegations involving misuse or sharing of confidential information, while ASIC is also conducting a separate investigation into allegations that KPMG Australia employees improperly used confidential client information to develop new business.

The latest review builds on the aftermath of the PwC Australia tax leak scandal. That scandal came to light in 2023, stemming from former tax partner Peter-John Collins leaking confidential government information he obtained while advising the Australian Treasury on new multinational tax avoidance laws. Subsequent internal emails showed that before the legislation was made public, this information had circulated within PwC, allowing partners to pitch advice to potential clients before the new rules took effect.

Regulatory scrutiny continues to expand. Earlier this year, KPMG Australia disclosed that more than twenty employees, including a partner fined A$10,000, had cheated using artificial intelligence in internal training exams. The company also recently announced significant job cuts affecting staff and partners. Additionally, KPMG Australia is mired in allegations of misusing confidential client information to win audit and consulting work, a controversy that has led CEO Andrew Yates and COO Eileen Hoggett to step down from executive roles, with the latter remaining as a partner.

Separately, an ASIC investigation found misconduct by KPMG in handling confidential client information and its whistleblower processes. At EY Australia, an employee was dismissed for allegedly accessing bank account information of Australian Prime Minister Anthony Albanese, his wife, and an EY partner during an audit project for Commonwealth Bank of Australia.

The accumulation of scandals has prompted the Australian Treasury to re-examine how it regulates large domestic accounting firms. In a consultation paper released this month, the Treasury wrote: "We have seen conduct by large Australian accounting, audit, and consulting firms that is not fair and honest," noting that such conduct "undermines public trust in the firms concerned and raises broader questions about the resilience of the framework that maintains market integrity."

The Treasury also stated that stakeholder feedback and recent events confirm "there are gaps in the current regulation of the audit industry in areas including audit independence and ethics, audit firm culture and values, firm-wide monitoring systems and internal controls, and the prioritization of audit quality."

The paper proposes several options, including splitting audit and consulting businesses, expanding ASIC's regulatory powers over partnership firms, strengthening governance requirements, and introducing mandatory tendering of audit engagements every ten years. One of the most significant proposals is implementing a mandatory 20-year audit firm rotation system.

This proposal would significantly diverge from current US standards. The US Sarbanes-Oxley Act requires public companies to rotate their lead audit partner every five years to maintain audit independence, but does not require companies to change audit firms at any point. The Australian proposal would require companies to ultimately switch audit firms entirely.

New Zealand survey reveals shifting career expectations

Across the Tasman Sea, Australia's closest economic neighbor is highlighting another challenge facing the Big Four: attracting the next generation of accountants. Deloitte's latest Gen Z and Millennial Survey shows that many young professionals are redefining what career success means. Although 77% of Gen Z respondents and 76% of Millennial respondents said they want to hold leadership positions at some stage, only 8% of Gen Z and 6% of Millennials ranked advancing into leadership as their top career goal.

For Gen Z respondents, financial independence and job security rank among the most important career priorities; Millennials are more inclined toward maintaining a healthy work-life balance. Respondents said that higher pay, greater work flexibility, and a clearer understanding of advancement paths would make leadership positions more attractive.

This mindset contrasts sharply with the career model that has defined the public accounting industry for decades. The Big Four have traditionally offered young accountants intensive training and broad client exposure, while expecting them to endure busy seasons and long hours early in their careers. Partnership remains the ultimate goal for some, while many others use the experience to move into corporate finance leadership roles.

These trade-offs may be increasingly difficult to justify. In New Zealand, 64% of Gen Z respondents and 67% of Millennials said financial pressure has forced them to delay major life decisions, both significantly higher than global averages. Housing affordability also influences career choices, with about seven in ten respondents saying it affects where they choose to work.

Workplace culture matters too. More than four in ten Gen Z respondents said they feel stressed all or most of the time, compared with about one-third of Millennials. Long working hours and not having enough time to complete tasks were cited as major workplace stressors in the survey. Nearly all respondents said having a sense of purpose is essential to job satisfaction.

Lauren Foster, a partner at Deloitte New Zealand, said the survey results indicate young professionals remain interested in leadership positions but are becoming more discerning about the path to them. "Leadership roles are still attractive, but young New Zealanders are carefully examining the trade-offs involved," Foster said. "Employers looking to build a pipeline of future leaders need to make leadership roles more sustainable, better supported, and more clearly linked to personal development."

Australia's regulatory push and Deloitte's workforce data together point to an industry at a crossroads in human capital management. The Big Four have long relied on intense early-career experiences, promising partnership or quality opportunities within the industry as rewards. Deloitte's survey results indicate that young professionals are increasingly reassessing this contract—a shift that could have as profound an impact on the industry globally as the regulatory scrutiny unfolding in Australia.