Key facts
- KPMG staff leaked confidential Optus information to colleagues bidding for a Telstra audit contract.
- KPMG admitted to surveilling a whistleblower's laptop and dismissing their concerns.
- The whistleblower alleged a 'culture of fear, retribution and revenue growth at all costs' within KPMG.
- Former CEO Andrew Yates resigned due to the handling of the whistleblower allegations.
- Chartered Accountants Australia and New Zealand is investigating 12 individuals, including Yates, over the scandal.
KPMG has admitted to a significant breach of ethics, with staff leaking confidential Optus information to colleagues pursuing an audit contract with competitor Telstra. The consulting firm also surveilled a whistleblower's laptop and dismissed their concerns, according to testimony at a parliamentary inquiry.
KPMG's chair, Martin Sheppard, confirmed that staff who audited Optus shared unredacted confidential information with the team bidding for Telstra's audit contract. This confirmation was a key factor in the resignation of former KPMG CEO Andrew Yates in May, who stated he felt he needed to take accountability for the situation.
The peak accounting body, Chartered Accountants Australia and New Zealand (CAANZ), is investigating Yates and 11 other individuals over the scandal. CAANZ chief executive Ainslie van Onselen described the alleged conduct as 'disgusting'.
Partners Eileen Hoggett and Paul Rogers have stood down from audit work and are under investigation by the Australian Securities and Investments Commission for their alleged role in leaking Lendlease information. Lendlease CEO Tony Lombardo stated that KPMG's updates on its investigations have been 'piecemeal and sporadic', and the company will seek a new auditor and reimbursement for associated costs.
Members of the parliamentary joint committee heavily scrutinized KPMG's initial handling of the whistleblower's concerns, which were reportedly treated as a human resources issue. KPMG's former head of audit, Julian McPherson, authorized searches of the whistleblower's computer, citing concerns about potential leaks of KPMG information. The whistleblower alleged a 'culture of fear, retribution and revenue growth at all costs' within the organization.
Further computer searches uncovered evidence supporting the whistleblower's allegations, prompting KPMG to begin its investigation. The whistleblower has since signed a deed of release and no longer works for KPMG. Yates acknowledged that the firm did not handle the complaints appropriately and could have adopted a more 'humanistic approach'.