KPMG Australia faces layoffs and client exits amid audit scandal

KPMG Australia is facing severe consequences following a whistleblower scandal involving the misuse of confidential client documents to secure audit mandates. The firm has announced plans to lay off approximately 1,000 staff and dozens of partners, representing more than 10 per cent of its workforce, as part of an effort to stabilize leadership.

The fallout includes significant client losses and regulatory restrictions. Property developer Lendlease has ended its 68-year relationship with the firm, and KPMG is currently banned from bidding for public sector work at the federal level and in New South Wales and Victoria until late September. Additionally, partners face potential pay cuts of roughly 20%.

The scandal has also drawn parliamentary scrutiny toward law firms Ashurst and Allens. Documents from the Parliamentary Joint Committee on Corporations and Financial Services highlight discrepancies regarding the scope of legal work performed for KPMG. While KPMG previously suggested external legal reviews supported its internal investigation, Ashurst testified that it was engaged to provide discrete legal advice rather than to conduct a formal investigation into the whistleblower's allegations.