Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), has launched a formal investigation into three partners of KPMG Australia. The investigation follows whistleblower allegations that the accounting firm misused confidential client data to secure lucrative audit contracts. This development has many blue-chip clients and government agencies re-evaluating their affiliation with Big Four firms. ASIC launched a preliminary inquiry into KPMG in April, which escalated to a formal investigation after the firm’s CEO and audit chief resigned last week. ASIC chair Sarah Court confirmed that three registered company auditors were in the scope, noting that the inquiry was active.
Allegations brought to Parliament by Labor senator Deborah O’Neill claim secret board papers from leading real estate giant Lendlease were used to bolster bids for audit tenders for major Australian bank Westpac and leading property firm Dexus. ASIC has identified Paul Rogers and Elaine Hoggatt as the two auditors named by the whistleblower. Ms. Hoggatt recently stepped down as chief operating officer but remains an audit partner. KPMG declined to comment, having engaged law firm Allens for an external inquiry after an internal one failed to prove corruption. The ASIC Chair Court expressed “deep concerns” but reiterated the regulator’s limitation on taking action against individual auditors, not firms.
The Australian Department of Finance is taking the allegations “extremely seriously”, which reserves the right to suspend KPMG or bar the firm from bidding for federal government work. Client reactions are emerging: Dexus announced Ms Hoggett would not be signing off her 2026 accounts. REST, the $105 billion pension fund that uses KPMG for internal audit and tax services, is seeking more information. Michelle Bullock, governor of the country’s central bank, the Reserve Bank of Australia, indicated that KPMG would not be reappointed for its whistleblower service. The development echoes rival PwC Australia’s response to the 2023 scandal, prompting a similar re-examination of clients.
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