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KPMG Australia audit scandal and restructuring

Updated 4 times since CLSTR started tracking revisions of this situation.

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2026-08-25 14:42 UTC → 2026-08-26 09:17 UTC · added ~~removed~~

Following the May 2026 resignations of CEO Andrew Yates and audit partner Julian McPherson, KPMG Australia has faced a deepening crisis involving the misuse of confidential client data. Whistleblower allegations revealed that board papers from Lendlease were used to secure audit contracts with Westpac and Dexus, and sensitive Optus data was allegedly used in a bid for Telstra. This led to the resignation of Chairman Martin Sheppard and COO Eileen Hoggett, as well as audit partner Paul Rogers. Regulatory and parliamentary scrutiny has intensified. ASIC has launched a formal investigation into several partners, and the matter was referred to the National Anti-Corruption Commission. A Senate inquiry has also scrutinized the firm’s use of legal privilege to withhold documents. In response to these scandals, the Treasury proposed breaking up the Big Four, and the government has imposed a moratorium on new federal contracts for KPMG until late September 2026. ~~Parliamentary scrutiny has also extended to law firms Ashurst and Allens regarding the scope of legal work performed for KPMG.~~ KPMG is undergoing a major restructuring. The firm has announced plans to cut approximately 5 percent of its workforce, involving 27 partners and roughly 360 employees, primarily impacting the consulting and business services divisions. This follows a 16.9 per cent decrease in consulting revenue, despite growth in audit and tax arms. The firm reported a 1 per cent decline in annual revenue for fiscal 2026 to $2.26 billion. Partners face potential pay cuts, with average equity partner remuneration having already fallen by 13 percent. CEO John Sams warned that difficult market conditions and the impact of the firm’s conduct are expected to persist into fiscal year 2027. In a significant financial blow, Macquarie Group announced it will not recommend KPMG as its incoming auditor, opting for PwC instead.

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