KPMG chairman, two Audit Partners announce their exits amid public scandal
The leadership exodus at KPMG Australia continues as Board Chairman Martin Sheppard and two Audit Partners exit the firm, which unveiled an Action Plan in a bid to recover from the audit leak scandal.
KPMG announced Sheppard's departure this week, as well as the exits of Audit Partners Paul Rogers and Eileen Hoggett, who recently stepped down from her chief operating officer position.
Rogers and Hoggett were among the named individuals involving the misuse of Lendlease board papers, where a whistleblower alleged were taken by the pair and "physically secured in Ms Hoggett's locker."
Their exits come following the departure of CEO Andrew Yates and Julian McPherson, KPMG Australia's managing partner of audit and assurance, and in the wake of reports that KPMG's global leadership is preventing further partner departures in Australia.
KPMG said a process is underway to appoint a new CEO, who will refresh the Big Four company's executive team.
"The decisions announced today are necessary and immediate," said interim CEO Stan Stavros in a statement. "We did not meet the standards expected of us, and we recognise the impact this has had on the whistleblower, our people, our clients, and the community."
KPMG's new Action Plan
The changes in leadership come as KPMG Australia published an Action Plan that aims to "address the integrity issues and strengthen accountability" across the firm.
The plan outlines an overhaul in governance, including the appointment of an independent chair, as well as independent directors to the Australian Board.
These independent Board members will also be involved in Board sub-committees overseeing matters including audit quality, ethics, and whistleblower oversight.
The Action Plan also states that the firm's system of quality management will be strengthened, while its audit pursuit policies and procedures will be amended.
Firm-wide training on client confidentiality, privacy, and information protection, with additional targeted confidentiality training for all Audit partners and directors, will also be mandated, according to the Action Plan.
"We are acting where it matters: changing leadership, strengthening independent governance, commissioning external reviews, improving whistleblower oversight, tightening controls, and reinforcing accountability across the firm," Stavros said.
"Trust will only be rebuilt through sustained action and demonstrable change. We are determined to confront what went wrong, act transparently, and ensure these failings are not repeated."
New review on whistleblowing policy
KPMG Australia has been embroiled in a public scandal after a whistleblower came out accusing the Big Four firm of misusing confidential client documents.
The accusations were initially dismissed by KPMG after its own investigations concluded they were "unsubstantiated." Another review, this time by Principia Advisory, will be carried out on the company's whistleblowing system.
The company, under its Action Plan, also committed to reviewing and updating its conduct and consequences framework, as well as its whistleblower policies and procedures.
Firm-wide training will also be provided to ensure clear guidance and requirements for how whistleblower disclosures must be identified, escalated, and governed.
"Our responsibility now is to ensure stronger systems, clearer accountability, and better leadership. We will keep clients, people, and stakeholders updated on our progress and hold ourselves accountable as we drive meaningful, lasting change," Stavros said.
