KPMG Australia CEO and audit head quit over whistleblower investigation

[SYDNEY] Accounting firm KPMG Australia said on Friday (May 29) that its CEO and head of audit had resigned because of shortcomings in the handling of a whistleblower’s complaints about sharing client data, in a fresh scandal for the country’s professional services sector.

CEO Andrew Yates, who joined the firm in 1990 and became CEO in 2021, resigned after its investigation into the whistleblower’s allegations “fell short of the firm’s expectations, those of the whistleblower and the broader community”, the firm said in a statement.

The firm’s managing partner of audit and assurance, Julian McPherson, also stepped down and would leave the firm after an orderly transition, the statement added.

“It is clear that in this case we have let ourselves down and I take accountability,” Yates said in the same statement.

McPherson added: “Matters have arisen for which I am responsible, and I take accountability.”

KPMG said that a whistleblower had made three complaints about client documents being shared inappropriately, and its previous investigations had found the complaints unsubstantiated. However, the firm “now recognises these processes fell short”.

The Australian Securities and Investments Commission (Asic) had started a preliminary investigation into the conduct of three KPMG registered company auditors, regulator commissioner Kate O’Rourke told a parliamentary hearing on Friday, without naming the auditors.

Asic chair Joe Longo, who leaves the role on May 31, told the hearing the regulator was not involved in the KPMG departures.

Renewed scrutiny for sector

The resignations bring new scrutiny to a sector that was rocked by reports in 2023 that rival PwC shared confidential Australian government information with prospective clients, resulting in a spinoff of the firm’s government consulting arm and multiple employee departures.

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KPMG’s statement did not name the whistleblower and did not say which client or clients had documents allegedly shared inappropriately. It said that it had engaged a law firm and a corporate ethics consultant to review its whistleblower policies and processes.

KPMG audits some of Australia’s biggest companies, including major banks Westpac and ANZ and investment bank Macquarie Group. ANZ declined to comment, while Westpac and Macquarie were not immediately available for comment.

“We acknowledge we have work to do to rebuild trust,” said KPMG Australia chairman Martin Sheppard.

“That’s why we are not asking anyone to take our word for it, and we are inviting scrutiny and challenge on our remedial actions.” REUTERS