Australia Considers Major Big Four Reforms: What It Could Mean for Us

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Australia is considering the biggest shake-up of its accounting profession in decades.

On 1 July 2026, the Australian Treasury released an options paper asking whether the country's regulatory framework for accounting, auditing and consulting firms is still fit for purpose. The paper does not change the law. Instead, it invites public comment on several possible reforms before government decides whether to proceed.

For South African accountants and auditors, the proposals are worth watching because many of the same issues, audit quality, independence and concentration of the audit market, are being debated locally.

Why is Australia considering reform?

The consultation follows several high-profile scandals involving large professional firms.

Most notably, PwC Australia admitted that confidential government tax information had been improperly shared with clients, resulting in parliamentary inquiries and significant changes within the firm.

More recently, KPMG Australia has come under investigation following allegations involving confidential information and concerns about its handling of an internal whistleblower complaint.

According to the Australian Treasury, these events have raised broader questions about audit quality, governance, independence, ethics and accountability across the profession.

What reforms are being considered?

The consultation paper contains a range of options rather than a single proposal.

Among the most significant are:

• Structural separation between audit and consulting businesses within large multidisciplinary firms.

• Operational separation, where firms could continue offering both services but with stricter rules preventing audit and advisory work for the same client.

• Greater regulatory oversight of audit firms, including stronger powers for the Australian Securities and Investments Commission (ASIC).

• Improved governance requirements for large audit partnerships.

• Changes to disciplinary processes and stronger sanctions.

• Measures to improve competition in the audit market.

The Australian Treasury is seeking feedback on the costs, benefits and practical implications of each option before making recommendations to government.

Why does this matter?

The Australian Treasury argues that audit quality is not determined only by the work of the individual engagement partner. Firm-wide decisions also influence audit quality, including:

• staff resourcing;

• remuneration structures;

• quality management systems;

• conflict-of-interest policies;

• leadership and firm culture.

The paper notes that these decisions may not always be subject to adequate regulatory oversight, particularly where firms operate as partnerships.

Could South Africa face similar reforms?

Possibly. South Africa has already experienced several major corporate failures, including Steinhoff and VBS Mutual Bank, that prompted questions about auditor independence and regulatory oversight. If Australia ultimately introduces stronger regulation, it is likely to influence international discussions, including those in South Africa. That does not mean South Africa will adopt identical reforms, but regulators will almost certainly study Australia's experience closely.

What should practitioners watch?

The consultation closes on 12 August 2026, after which the Australian Government will decide whether any legislative changes should proceed. At this stage, none of the proposed reforms have been approved or implemented. South African practitioners should monitor developments in three areas:

• whether regulators receive stronger powers over audit firms;

• whether further restrictions are introduced on providing audit and consulting services to the same client; and

• whether measures are adopted to improve competition within the audit market.

Practical takeaway

The Australian consultation is not simply about the Big Four. It is about restoring confidence in the audit profession. Regardless of whether every proposal becomes law, the direction of travel is clear: regulators are placing greater emphasis on independence, governance, ethics and audit quality. For South African practices, the lesson is straightforward. Strong governance, effective quality management systems and a culture that encourages ethical behaviour are becoming increasingly important, not only for compliance, but also for maintaining public trust.