Governance, quality and risk

Our network structure

PwC is a tech-forward, people-empowered network, delivering assurance, advisory, tax and legal services in 136 countries. By combining deep local expertise with advanced global capabilities, we help clients create and protect value.

PwC is a global network of separate firms operating under the PwC brand (referred to as the PwC network), coordinated by PricewaterhouseCoopers International Limited (PwCIL), a private company limited by guarantee in England and Wales.

The firms in our network are committed to working together to provide quality services on a global scale to international and local clients, while remaining local businesses with deep knowledge of local laws, regulations, and standards.

As members of the PwC network, PwC firms benefit from access to network methodologies and resources. In return, they agree to abide by certain common policies and standards, to further the network’s vision and values and to conduct themselves in a way that protects the reputation of the PwC network.

PwCIL does not practice accountancy or provide services to clients. PwCIL facilitates coordination between PwC firms. Focusing on key areas such as strategy, brand, and risk and quality, the Network Leadership Team and Global Board of PwCIL develop and implement policies and initiatives to achieve a common and coordinated approach among individual firms where appropriate.

More information on our network structure can be found here.

The importance of governance

Strong governance enables us to uphold our commitment to integrity, build trust with our stakeholders and deliver value for our clients.

Our Network Leadership Team (NLT) sets the overall strategy for the PwC network and the standards to which firms agree to adhere. PwCIL’s Global Board is responsible for the governance of PwCIL and the PwC network, oversight of the NLT, and approval of network standards. The standards are designed to support consistently high performance across the PwC network. Find further details of our Network Leadership Team and Global Board here.

Each PwC firm is required to have a separate local governance body to oversee the performance of the firm’s leadership and to provide direction and guidance.

Each year PwC firms assess their compliance with the network standards. All partners and people at each PwC firm complete individual annual compliance confirmations indicating their understanding of, and compliance with, those policies that are applicable to them.

Quality: approach, performance, key actions to enhance

Delivering quality is at the core of everything we do. It’s the foundation of our stakeholder relationships, the source of our reputation and the key to our success.

Quality is not just our goal — it’s fundamental to our identity and a benchmark by which we measure our performance. Our focus on quality influences every aspect of our work from the way we engage with clients to the solutions we develop.

PwC invests in and monitors performance in areas critical to delivering quality:

• Organisational culture and accountability
• Reporting and compliance with both external requirements and internal policies
• Frameworks for quality management
• Certified and experienced professionals
• Controls, policies, processes and monitoring
• Technologies
• Governance

Leaders throughout the PwC network are expected to reinforce PwC’s focus on quality through setting the right tone at the top, communicating expectations to PwC people, proactively investing in and monitoring quality, learning from any mistakes, and holding themselves and PwC people accountable where necessary.

PwC’s values and the behaviours we expect of our people — in particular our commitment to quality and integrity — set clear expectations for how people carry out their work. By embedding these values into leadership, culture, and everyday conduct, PwC helps to ensure the consistent delivery of quality for clients and stakeholders.

Below is an explanation of how each line of service delivers quality.

Tax and Legal Services

Tax and Legal Services delivers quality advice that is aligned with our purpose and professional standards.

We provide a holistic view for clients by addressing complex issues using our people’s deep technical expertise. Our tax and legal professionals provide quality services while being empowered to think strategically, reimagine solutions and bring different capabilities together so our clients can create and protect value.

We continue to invest in the future of our clients, our people and our network, including focused investments in:

• Connected Tax Compliance, including Pillar Two
• Generative AI with game-changing AI alliances
• Alliances to enable us to offer broader solutions to our clients, including our global strategic collaboration with Microsoft, Google and Icertis
• Sightline, our single global tax technology platform

These investments enable data-driven insights, AI powered expertise, and one connected approach so our clients can navigate complexity, shape transformation and focus on what matters most to them.

Quality is paramount to what we do as a network, and every plan, action and service we deliver starts from that foundation. This is a non-negotiable on how we do business and conduct ourselves as tax and legal advisers. To be true to our commitment to deliver quality outcomes, we link quality to each of our Global Tax and Legal Services strategic priorities and core areas. We enforce a culture of accountability in which everyone is expected to behave ethically and professionally by putting quality first.

Our approach to quality is grounded in our purpose and values as set out in our Global Tax Code of Conduct, which requires that:

• Tax advice is given based on an assessment of the client’s specific facts and circumstances.
• Tax advice that results in positions taken in a client’s tax return will be supported by a credible basis in tax law.
• PwC’s tax advice assumes that clients will disclose all relevant facts to tax authorities, in line with legal requirements and allowing for further enquiries if needed.
• As trusted business advisers, when giving tax advice, we help clients understand the broader context, including economic, commercial and/or reputational risks, as appropriate in the circumstances.
• PwC firms advise clients of appropriate options available to them under the law with regard to all the principles contained in the Global Tax Code of Conduct.

In addition to the Global Tax Code of Conduct, which guides our day-to-day practice, we’ve established Tax Policy Panels across the network to support our most sensitive, complex and cross-border engagements. The Panels are composed of experienced partners and subject matter experts who provide holistic, quality advice that considers the broader business and societal context.

Advisory

PwC Advisory’s unique value lies in our trusted reputation for delivering high-impact solutions during critical moments and driving sustained value.

By bringing together our deep expertise and our rigorous commitment to quality, we help businesses solve their most important and complex problems, seize new growth opportunities and create competitive advantages that endure. Our global multidisciplinary capabilities across strategy, consulting, deals, and risk, alongside assurance and tax and legal, allow us to deliver true cross-competency solutions, guided by a human-centric, AI-powered and quality-focused approach that consistently delivers measurable impact.

PwC’s Advisory professionals address stakeholder expectations by enhancing quality through three lenses:

• The quality of our people. We continuously upskill and invest in our people — including developing our people’s capabilities and empowering them to integrate the latest technologies — so we can create sustained value for our clients.
• The quality of delivery. We proactively identify, manage and mitigate risks associated with complex transformations. In addition, we use leading methodologies and AI-powered innovation to enable consistency and quality while delivering measurable impact.
• The quality of client experience. Our people deliver distinctive client experiences and build long-term collaborations by leveraging a diverse range of capabilities, technologies, industry expertise, and functional know-how so that our clients receive solutions with a lasting impact.

To reinforce and enable our commitment to quality, PwC firms implement programmes designed to understand, monitor and promote quality across our engagements. These include frequent reviews of our most significant engagements to evaluate and facilitate quality and to make sure we are delivering sustained value to our clients.

Assurance

PwC’s assurance practices are dedicated to meeting evolving expectations around quality and the type of information that benefits from assurance beyond primary financial reporting.

Assured information helps build trust in capital markets and in companies’ performance on key issues such as sustainability. To build trust effectively, assurance must be consistent with professional standards and meet the increasingly complex expectations of a growing group of stakeholders. That’s why we are committed to continuous improvement in the quality of our assurance services, grounded in maintaining our independence and objectivity, adhering to the ethical requirements of our profession and performing our work in accordance with the applicable professional standards.

We’re also reimagining our role in building trust in the information that matters most to our clients and their stakeholders. By bringing together multidisciplinary perspectives, deep technical expertise and next-level technology, we help our clients as they seek to build trust that is meaningful and measurable. Our goal is to work with our clients as they protect what matters now, while powering the future — allowing organisations to navigate complexity and create sustainable value.

Focusing on audit and assurance quality

As delivering quality audits and assurance engagements is central to our purpose, we address any instance of a sub-standard engagement with utmost seriousness, assessing and mitigating its impact, identifying the root cause(s), and using the experience as an opportunity to learn and enhance quality for future audits and assurance engagements.

Member firms emphasise the importance of quality — both in outcomes and behaviours — in the evaluation, recognition, and accountability of partners and leadership teams. Quality is a key factor in our performance evaluations and career progression decisions for our partners and people.

We welcome increased public focus on audit and assurance quality, and the dialogue about how auditors and assurance practitioners, investors and other stakeholders can work together to increase the level of confidence in financial and nonfinancial reporting. We actively contribute to this dialogue with audit committees, boards, regulators and standard-setters worldwide, both directly as PwC, and also collaboratively as a profession through organisations like the Global Public Policy Committee and the Center for Audit Quality in the US.

Framework that enables quality

The quality of our audit and assurance engagements is built on having the right culture and the right people, supported by effective methodologies, governance, processes and technology. PwC’s assurance quality management framework — Quality Management for Service Excellence (QMSE) — directs each firm to consider specific risks to quality and respond appropriately in line with its individual circumstances. Our approach integrates quality management into how each firm runs its audit and assurance business and manages risk rather than viewing quality and risk management as standalone activities.

The QMSE framework is designed to enable member firms to meet the objectives and requirements of International Standard on Quality Management (ISQM) 1, an objectives based standard that expects firms to have a system of quality management (SoQM) that operates in a continuous and iterative manner taking into consideration the conditions, events, circumstances, actions and inactions that impact a firm’s ability to deliver quality engagements. It sets expectations regarding each firm’s responsibilities around monitoring and remediation, emphasising the need for proactive, real-time monitoring of the SoQM, an effective and timely root cause analysis process, and timely and effective remediation of deficiencies.

Under ISQM 1, each firm is required to conclude whether its SoQM provides the firm with reasonable assurance that the objectives of the SoQM are being achieved. The QMSE framework and related guidance also support member firms that are registered with the US PCAOB in meeting the objectives and requirements of the PCAOB’s standard on a firm’s systems of quality control.

The evolution of the QMSE framework has positioned our network to adapt to future regulatory developments, such as the PCAOB’s new quality control standard, QC 1000. Many of our firms expect to pilot key provisions of the new standard in the coming year in advance of the effective date of 15 December 2026, while continuing to comply with currently effective standards.

Values, judgement, objectivity and professional scepticism

Performing quality audit and assurance engagements requires more than just the right tools and processes. In the context of a financial statement audit, the auditor’s role is to reach a professional judgement based on reasonable assurance about whether the financial statements prepared by the entity’s management are, as a whole, free of material misstatement and present a fair picture of the entity’s financial performance and position. To carry out this assessment effectively, PwC auditors apply professional scepticism, objectivity, specialist skills and judgement. PwC’s values guide our people in working with clients and performing engagements, behaving ethically and operating in a trustworthy manner. This is expanded upon in the Ethics and Independence section below.

Quality starts and ends with people

We aim to recruit, train, develop and retain the best and brightest people who are values-driven and who share our strong sense of responsibility for delivering quality services. To prepare people and partners for the delivery of quality assurance services, our people have access to a comprehensive curriculum of formal and informal learning and technical courses, with a particular focus on sustainability, ethics, data and AI skills. We also develop and support our people through coaching, on-the-job training, and development learned through diverse experiences and by providing access to expertise through our multidisciplinary model, which brings together varied expertise across a portfolio of disciplines and deep industry knowledge.

Internal and external inspection results

Results of our network internal inspection for audit engagements

Our internal inspections

Engagement Compliance Reviews (ECRs) are carried out by PwC firms and include reviews of completed engagements. These periodic reviews are designed to determine whether an engagement was performed in compliance with PwC Audit guidance, applicable professional standards and other applicable engagement related policies and procedures.

ECRs are led by experienced independent assurance partners supported by independent teams of directors, senior managers and specialists. Review teams are resourced to reflect the specialist knowledge or experience needed to objectively assess the selected engagements and are independent from those who are either subject to the review or are potentially affected by the results.

For the 2025 inspection cycle, of the 1,807 audit engagement reviews completed through our internal inspection process, 96.8% were rated as Compliant, and 58 (3.2%) were rated as Non-Compliant. Of those rated Non-Compliant, five have been assessed as requiring a restatement of the audited organisation’s financial statements and/or for the auditor’s report to be withdrawn or reissued.

In addition to understanding and responding to the impact of any quality findings on the audit engagement, firms assess whether those findings indicate a deficiency in their system of quality management and, if so, determine appropriate remediation actions. The PwC network undertakes periodic reviews to evaluate certain elements of firms’ SoQMs. We also look at the firm leadership’s own assessment of the effectiveness of their SoQM and their determination of whether the overall quality objective, which includes meeting the objectives and requirements of ISQM 1, has been achieved with reasonable assurance.

We continue to invest in enhancing audit quality through this process, and we remain fully committed to a culture of continuous improvement.

External inspection activities

At PwC, our commitment to audit quality is reinforced through regular external inspections conducted by audit regulators and professional bodies. The rigorous scrutiny applied by regulatory authorities helps to align our audits with professional standards and regulatory requirements. This external oversight not only holds us accountable but also provides the public and our clients with additional confidence in the reliability and integrity of our audit services.

In addition to our internal inspections programme, member firms are subject to monitoring and inspection by external regulators. In all, 56 of these regulators are members of the International Forum of Independent Audit Regulators (IFIAR).

How we identify and manage network risks

At PwC, we understand that robust risk management is fundamental to sustaining the trust and confidence of our clients, regulators and stakeholders. We maintain a strong and responsive enterprise risk management (ERM) framework, which is reviewed regularly to reflect the dynamic and evolving nature of the risks we face as a global network. We anticipate and respond to risks across our business, supported by the PwC network’s governance and oversight structure. This structure includes a number of key elements, each designed to reinforce sound risk awareness, accountability and decision-making across the network:

• Global Board of PricewaterhouseCoopers International Limited (PwCIL): Provides oversight and approval for the network’s ERM approach
• Risk Committee: The Global Board committee that oversees risk and quality within the network and the monitoring of compliance with network standards, policies and legal and regulatory requirements
• Network Leadership Team: Provides strategic direction for the PwC network, including matters related to ERM
• Global Chief Risk and Regulatory Officer: Responsible for leading the network’s risk management activities, including the design, operation, reporting and continued development of the Network ERM framework
• Global Leadership Team: Regularly evaluates significant risks and related responses and provides direction on compliance, monitoring and ongoing risk oversight activities

Each year, we review the risks with the greatest potential impact on the PwC network, known as Key Network Risks (KNRs). KNRs are risks which have the potential to either undermine the achievement of the network strategy and business objectives or fundamentally damage the network and compromise its future. We consider both the external and internal challenges we face today and the emerging issues that could shape the future, including:

• Client and service quality, and our ability to meet obligations to clients, regulators and other stakeholders
• Trust and reputation, sustaining the confidence of our stakeholders
• Progress against the network strategy and our purpose, with a focus on creating and protecting value
• Adaptation to shifts in the professional services industry, including regulatory developments and emerging technologies
• Cyber and digital resilience, including protection of data, safeguarding our systems and maintaining business continuity
• Compliance with applicable laws, regulations, professional standards, and policies
• Recruitment, development and retention of talent to support quality delivery and innovation
• Network-wide financial resilience, including the ability to sustain revenues and withstand economic, regulatory and geopolitical shocks

Taken together, these factors inform our views of the KNRs and guide the actions we take in response. We regularly assess the effectiveness of those responses, incorporating lessons learned and adapting to changes in the environment to strengthen the network’s ability to respond. These risks evolve over time and reflect issues whose consequences could extend beyond a single PwC firm to affect the network. The KNRs and related risk responses are reviewed by the Global Board.

Ethics and compliance

The PwC Global Code of Conduct (the Code) and PwC purpose and values describe the values and behaviours that guide how we conduct ourselves. We are all responsible for maintaining high standards of ethical behaviour and acting with integrity to maintain the trust that our clients, communities and people place in us.

The Code and our ethical framework are based on the fundamental principles set out by the International Ethics Standards Board for Accountants (IESBA):

• Integrity. Be straightforward and honest in all professional and business relationships.
• Objectivity. Do not allow bias, conflict of interest or undue influence of others to compromise professional or business judgements.
• Professional competence and due care. Attain and maintain professional knowledge and skills at the level required to deliver competent professional services to clients based on current developments in practice, legislation and techniques; and act diligently and in accordance with applicable technical and professional standards.
• Confidentiality. Respect the confidentiality of information acquired as a result of professional and business relationships and do not disclose any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose. Confidential information acquired as a result of professional and business relationships should not be used for the personal advantage of the professional accountant or third parties.
• Professional behaviour. Comply with relevant laws and regulations, behave in a manner consistent with the requirement to act in the public interest, and avoid any action that discredits the profession.

At PwC, we have a strong ‘Speak up’ culture designed to help our people, clients and third parties feel comfortable and safe raising a question or concern. There are many channels of reporting including a confidential PwC Ethics Helpline within each PwC firm. Reports are investigated in an appropriate, timely and objective manner, and we have a strict non-retaliation policy.

The Code reinforces the importance of how we conduct business within professional standards, laws and regulations. All PwC firms must comply with our network standards, which cover areas related to ethics and compliance, including business conduct, independence, anti-money laundering, antitrust and fair competition, anti-corruption, information protection, sanctions laws, and insider trading.

All partners and staff are required to complete mandatory training that covers the ethics and compliance standards as part of new hire training when they join their local firm and on an annual basis thereafter. In addition, they must submit an annual compliance confirmation regarding the network and territory policies and compliance requirements.

In order to monitor and reinforce our ethics and compliance requirements, each PwC firm has an accountability framework that sets out consequences for behaviour that is inconsistent with our policies and procedures.

Objectivity and independence

As auditors of financial statements and providers of other types of professional services, PwC firms and their partners and people are expected to comply with the fundamental principles outlined above. Independence underpins these requirements in our work with assurance clients.

To achieve compliance with these principles, each PwC firm must comply with the PwC Global Independence Policy, which aligns with the IESBA International Independence Standards, supplemented by the SEC, PCAOB and EU Audit Regulation independence requirements, as applicable. The policy sets minimum standards for maintaining independence from assurance clients and addresses the interests and relationships of PwC firms and their partners and staff, including those relating to financial interests and other financial arrangements, the provision of services, use of technology and business relationships. Compliance with any additional jurisdictional requirements is also required.

As a member of the PwC network, each PwC firm has access to systems and tools which support firms and their partners and staff in executing and complying with our independence policies and procedures.

PwC firms apply global ethics and independence principles and guidelines that limit the non-assurance services they can provide to audit and assurance clients, including consideration of whether the provision of a service may be perceived as creating a lack of objectivity in any related assurance engagement. In effect, these prohibit auditors and assurance practitioners from acting in a management capacity or as an advocate for an audit or assurance client and/or auditing or otherwise providing assurance over the results of other services provided.

These guidelines are reinforced by regulatory restrictions on which services the firms can provide to audit clients. These restrictions vary by country but may include a complete prohibition on providing some services and caps on the revenue that can be generated from others as a proportion of audit fees. In addition to these restrictions, some firms have further limited the services they provide to certain clients in response to local circumstances.

Similarly, there are restrictions on close business relationships with audit clients.

Each PwC firm implements an Accountability Framework which addresses compliance with relevant independence standards and requirements, including those relating to interests and relationships of PwC partners and staff. This includes those relating to financial interests and other financial arrangements, the provision of services and business relationships.