Late last year, PwC began warning the corporate boards of audit clients that when ex-partners joined their ranks, the individual would continue to be paid by the firm under its retirement plan.
The firm has also added a specific disclosure about the retirement plan, but not the amount the specific director receives, in its audit independence letters to the board's audit committee.
Retirement plan
The moves were designed to inject transparency into the previously private payment arrangements of the firm with its ex-partners.
There is no similar disclosure regime for former partners who are directors at companies that PwC does not audit, even if they purchase consulting or other advisory services from the firm.
The retirement plan was raised during the inquiry with PwC, confirming reports by AFR Weekend that the consulting group continues to pay former partner Bill Edge as part of the retirement payment plan while he oversees a body that advises the government on the audit quality of the firm and its big four accounting rivals.
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Mr Edge is the chairman of the Financial Report Council (FRC), which oversees the effectiveness of the financial reporting system. The FRC has told the government there is little evidence of problems with local auditing standards.
The upbeat assessment is at odds with the opinion of the corporate regulator, which has repeatedly complained about the poor quality of corporate auditing in Australia, and the big four firms Deloitte, EY (the former Ernst and Young), KPMG and PwC, which have also conceded that audit quality can improve.
Mr Edge, who receives $100,540 for the part-time role, has previously denied that there is a conflict between his post-PwC position and his continuing payments from the firm.
In a separate response to questions on notice from the inquiry, he detailed the mechanics of the payment but not the amount.
"I receive retirement payments from PwC. These payments are not superannuation payments," he said.
"They are payments made with reference to my years of service and seniority, as an equity partner of the firm. The terms of the retirement payments were set at the time I became an equity partner."
He said the payment was a "fixed amount" that was "only adjusted upwards to account for CPI".
"The partnership deed restricts PwC’s ability to suspend or reduce payments made to retired partners. I do not believe public criticism of PwC by me or any retired partner would be grounds to terminate the payments," he said.
