On Friday, two members of KPMG Australia’s senior leadership team stepped down after the firm acknowledged it hadmistreated a whistleblower.
The whistleblower alleged the company misused confidential client information and misled a Senate inquiry. Their allegations were first aired in the Senate in March.
KPMG said it will “undertake an external review of our underlying speak-up culture”.
Here’s what you need to know.
Context
- KPMG is one of the ‘Big Four’ accounting firms, with offices across Australia and 137 other countries.
- A whistleblower is a person who reveals misconduct at an organisation, such as a company where they work.
- The Australian Securities and Investments Commission (ASIC) monitors big businesses’ behaviour.
- ASIC answers to the federal Joint Committee on Corporations and Financial Services, chaired by Senator Deborah O’Neill.
- MPs and Senators have parliamentary privilege, which lets them say things in Parliament without fear of being sued.
Whistleblower
In March, O’Neill gave a speech in the Senate where she quoted from a letter from an anonymous whistleblower at KPMG, using her parliamentary privilege to air their allegations without risking a lawsuit.
The whistleblower’s letter said they had already tried to raise their concerns internally at KPMG, and then with ASIC, before finally coming to O’Neill.
They alleged employees at KPMG took confidential documents from construction company Lendlease and used them to help the accounting firm win more clients, such as Westpac.
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The Lendlease example was one of several the whistleblower detailed, where KPMG staff allegedly behaved unethically to win contracts with major companies.
The whistleblower additionally alleged KPMG leadership had lied to a previous Senate inquiry.
They also alleged they had faced “adverse action” at work due to raising these concerns, which, if true, could be deemed illegal under the Fair Work Act.
KPMG response
KPMG Australia released a statement last Friday, noting its treatment of thewhistleblower and investigation into their allegations fell short.
As a result, CEO Andrew Yates and National Managing Partner for Audit and Assurance Julian McPhersonresigned.
Chairman Martin Sheppard said the firm “apologise[s] unreservedly to the whistleblower.”
An investigation into the company’s culture has been launched, joining an existing inquiry into the allegations and the whistleblowing.
“I have been committed to a speak-up culture in our firm, it is clear that in this case we have let ourselves down and I take accountability," KPMG Australia CEO Andrew Yates said in a statement on Friday.
Inquiry
The joint committee is in the midst of an inquiry into ASIC.
In March, the committee announced they would “consider the evidence” shared by O’Neill around alleged misconduct at KPMG.
On Friday, the committee discussed the Lendlease allegations.
The Sydney Morning Herald reported on Monday that Lendlease is reviewing its contract with KPMG.
