A push from inside KPMG is intensifying after the exits of chief executive Andrew Yates and audit head Julian McPherson failed to calm anger over alleged data misuse. More partners now want broader accountability, with calls for chairman Martin Sheppard and former chief operating officer Eileen Hoggett to step aside as the scandal widens.
The corporate regulator has confirmed Hoggett is among three registered auditors under investigation over allegations that confidential client information was improperly used. Westpac is weighing whether to reopen its $32 million-a-year audit mandate, two years after handing the work to KPMG, according to people familiar with those internal discussions.
Federal agencies are responding sharply, placing more than $270 million worth of KPMG contracts under close review and reopening scrutiny of how large partnerships are run. The Department of Finance has classified the matter as a “significant event” under rules introduced after the PwC tax leaks saga, triggering stricter disclosure and oversight settings.
Under those rules, public sector bodies can now insist KPMG confirm that no staff on government projects are tied to the alleged misconduct. The Assistant Treasurer has also directed officials to revisit partnership governance settings, arguing the seriousness of the allegations warrants a fresh look at how firms such as KPMG are structured and held to account.
Political pressure is compounding the commercial and regulatory fallout, with parliamentary hearings zeroing in on KPMG’s extensive ties to government departments and agencies. Greens senators are urging a ban on KPMG from future public spending, citing AusTender data showing dozens of audit engagements with the firm worth $27.4 million.
Internal consequences have already toppled the CEO and audit chief and resulted in Hoggett’s demotion from the chief operating officer role. Senior leaders in legal and people functions had reportedly pushed for significantly tougher sanctions on Hoggett after an internal review and an external assessment by Ashurst, but those recommendations were knocked back on the grounds that they belonged with the board.
Private sector clients are also demanding clarity, with Lendlease seeking explicit assurances that no KPMG personnel working on its audit are under investigation. KPMG partner Paul Rogers has since been removed from that account, after both organisations agreed he should step away from the role.
The Australian Securities & Investments Commission has confirmed it is now formally probing two KPMG partners as part of its broader review of alleged audit failings. Regulators have publicly identified Rogers and former chief operating officer Hoggett among the three auditors at the centre of the investigation, intensifying scrutiny of the firm’s governance and risk controls across its audit practice.
