KPMG under government scrutiny over accusations that it misused confidential data
KPMG Australia chief operating officer Eileen Hoggett is stepping down from her executive role in the wake of the growing allegations against the Big Four firm that it misused confidential client documents.
Hoggett will remain as a full-time auditor, according to local media reports. KPMG chief financial officer John Sams will be taking over her executive position.
The COO's move comes as KPMG deals with growing allegations that it misused confidential client documents.
Among the accusations is the allegation that it misused Lendlease board papers to win audit work at Westpac and Dexus. It is also accused of using confidential information from Macquarie and Westpac to pursue other contracts.
Lendlease has publicly confirmed that KPMG had misused its documents, ABC News reported. The company is now putting its external auditing contract out to tender next year after being a long-time client of the Big Four firm.
The allegations were released by Labor Senator Deborah O'Neill under parliamentary privilege in March, according to the ABC report.
Hoggett was among the named individuals in accusations involving Lendlease, where a whistleblower alleged that the client's confidential board papers were taken by the COO and co-lead Paul Rogers and "physically secured in Ms Hoggett's locker."
KPMG has denied the allegations, the Australian Financial Review reported. It previously disciplined Rogers for displaying confidential Lendlease board papers during a pitch.
The whistleblower's dismissed claims
The accusations were first raised by the whistleblower in May 2024, which were previously dismissed by KPMG after its own investigations concluded that they were "unsubstantiated."
In a statement in late May, however, the Big Four firm acknowledged that its own processes "fell short," leading to the departure of CEO Andrew Yates and Julian McPherson, KPMG Australia's managing partner of audit and assurance.
Yates' exit comes as he took the "ultimate responsibility" over the company's management of the whistleblower process and the management-led investigations, according to KPMG.
Stan Stavros has been appointed as KPMG's interim chief executive, who told employees that the company would continue working with the regulators examining the allegations.
"I come to this role not having been involved in the whistleblower process, but it is clear to me that we should have handled things differently," Stavros told employees, as reported by ABC News.
"I am 100% committed and will ensure we approach the issues in the right way."
KPMG is now holding another probe that is handled by Allens. It has also engaged with Principia Advisory to review the company's speak-up culture.
"KPMG is committed to transparency and will publish the findings of the Principia review. We will move swiftly to act upon their recommendations. We are reinforcing and strengthening the controls that protect client confidentiality, and we will set out for our clients the specific steps we are taking to keep their information protected," KPMG Chairman Martin Sheppard said in late May.
Under government scrutiny
Meanwhile, the Australian government is now putting KPMG under intense scrutiny amid the allegations.
The New South Wales government said in a statement on Wednesday that it is seeking assurances from KPMG about the management of its confidential information.
It also wants to know whether any personnel under investigation are currently working on NSW Government contracts.
"The information KPMG provides will inform any further action the Government may take," it said. "We are committed to upholding the highest standard among our suppliers."
Federal Finance Minister Katy Gallagher also said this week that the government was "deeply concerned" by the allegations, while the Australian Securities and Investments Commission said it is investigating the auditors who handled the whistleblower's complaint at KPMG.
The controversy surrounding KPMG comes as the government reviews its whistleblower protection laws under the Corporations Act.
