ASIC chair Sarah Court at Senate Estimates on 5 June 2026. The corporate watchdog is investigating KPMG. Image: Screenshot.
The Federal Government is set to examine all KPMG contracts with the public service, following allegations that the giant consultancy firm has been involved in unethical practices to win work with the Commonwealth.
But there is no suggestion yet that the Big Four accounting firm will get anything more than a ‘please explain’ and a slap on the wrist over its dodgy actions.
However, the Australian Securities and Investments Commission (ASIC) is investigating.
ASIC chair Sarah Court appeared before a Senate Estimates hearing on Friday (5 May) and said the regulator was looking at evidence.
“We’ve now commenced a formal investigation this week in relation to KPMG and a number of the registered company auditors that sit within it,” she said.
“I can assure you that ASIC has been engaging proactively with KPMG and that level of engagement has intensified.”
KPMG is accused of multiple violations of decent corporate behaviour, including sharing confidential client information to rig audit tenders, having its auditors use AI to cheat on internal exams, and breaching audit independence.
It has admitted to some of it, including failing to act appropriately when a whistleblower’s concerns were raised.
A whistleblower alleged that client documents were being inappropriately shared internally with the senior leadership team, but an internal investigation did not substantiate the claims.
A subsequent external independent investigation is now underway.
“KPMG Australia confirms its treatment of a whistleblower and investigation into their allegations fell short of the firm’s expectations, those of the whistleblower and the broader community,” the firm said in a statement.
KPMG’s chief executive officer, Andrew Yates, and auditing partner, Julian McPherson, have both resigned over the issue.
Asked during a media interview on Friday what the government plans to do about the behaviour, Assistant Treasurer Daniel Mulino said all KPMG contracts were being scrutinised.
“There is also a briefing coming up from the department, from Treasury to me in relation to whistleblower activity in light of this,” Mr Mulino said.
During Senate Estimates hearings on Thursday, the Reserve Bank confirmed it would not be using KPMG in the future for its whistleblower hotline service.
RBA Governor Michele Bullock told the hearing that the central bank was using KPMG for the hotline service, but was about to re-tender, and KPMG would not be reappointed.
But auditing contracts were handled by the Australian National Audit Office.
“We don’t have a direct relationship with them [KPMG],” she said.
“They are engaged by ANAO to do the audit of the financial statements.”
The Greens say enough is enough and that KPMG should be banned from all government contracts over its behaviour.
Finance and public sector spokesperson Barbara Pocock said the Federal Government holds dozens of active audit contracts with KPMG worth $27.4 million across several departments.
“It’s clear that KPMG’s rot spans far and wide in government. Repeated scandals show they are unfit for government work, yet Labor has given them millions of dollars in contracts,” Senator Pocock said.
“Why would the government hire a firm that’s been accused of sharing confidential client information to audit its books?
“Labor must immediately ban KPMG and stop these corrupt firms from milking taxpayers of millions of dollars while abusing the system for their gain.
“If the NSW government can call for a ban on KPMG, why can’t the Federal Government? “
Both the NSW and Victorian governments have put KPMG on notice, but the Federal Government appears reluctant to do the same.
The Greens have analysed the AusTender portal and have listed the contracts KPMG currently holds with Commonwealth agencies.
They include:
- The ANAO has multiple active audit contracts with KPMG to the value of more than $6.428 million
- The CSIRO has a $4.9 million internal audit contract with KPMG
- The Bureau of Meteorology has multiple active audit contracts with the firm to the value of $2.1 million
- The Department of Industry, Science and Resources has an internal auditing contract worth $1.748 million with KPMG, and
- The Australian Tax Office has a $680,000 contract with KPMG, which is more than three times the original quoted amount.
The Greens say the Big Four firms found to have been acting corruptly – such as KPMG and PwC – must be immediately banned from government contracts.
Senator Pocock said Labor needs to stop “feigning outrage” and expressions of “deep concern” and instead introduce the legislative and structural reforms that enforce transparency and public accountability.
“The government must stop allowing the Big Four to self-regulate,” she said.
“Labor needs to put an end to their special treatment – on tax, public reporting, professional liability and whistleblower protections – and regulate the Big Four like other large Australian firms.
“The latest KPMG scandals show the Big Four consultancy firms making a mockery of the parliament yet again.
“They have made millions of dollars from government work and abused the system.
“Labor needs to read the room and ban KPMG. Their ethics fail every pub test.”
Original Article published by Chris Johnson on Region Canberra.
