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FinanceASIC launches review of Big Four audit firms over misconduct claims
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The Australian Securities and Investments Commission (ASIC) has launched a review into how the 'Big Four' audit firms—Deloitte, EY, KPMG, and PwC—handle complaints about audit conduct, intensifying regulatory scrutiny. The move follows allegations that KPMG staff misused confidential client information to secure contracts. ASIC's review will focus on internal and whistleblower complaints related to audit practices, including the handling and sharing of confidential information. This proceeds alongside a separate investigation into specific KPMG allegations. ASIC Chair Sarah Court stated the allegations are serious and that ASIC will use its limited powers while engaging with government reform. The review comes as Australia's Treasury consults on reforms to strengthen oversight of professional services firms, potentially extending ASIC's role. The government is also considering structural options, including breaking up the Big Four, following a series of controversies, including a prior PwC scandal involving confidential tax data sharing.
Source report
By: Ellichipuram Umesh Source: The Accountant
The Australian Securities and Investments Commission (ASIC) has launched a review into how the 'Big Four' audit companies handle complaints about audit conduct, intensifying regulatory scrutiny of the sector.
The move follows allegations that KPMG staff misused confidential information to secure contracts and comes as the federal government weighs tougher controls on large accounting, audit, and consulting partnerships.
Scope of the Review
ASIC's review will focus on internal and whistleblower complaints related to audit practices, including:
- The handling of confidential information
- The use of confidential information
- The sharing of confidential information
This work will proceed alongside a separate, ongoing investigation into specific allegations involving KPMG.
Regulatory Response
ASIC Chair Sarah Court stated:
"The allegations concerning KPMG are serious. ASIC will use the existing suite of limited powers available to us, while continuing to engage constructively with the government's reform process."
The review is being launched as Australia's Treasury consults on reforms that could strengthen oversight of major professional services companies and potentially extend ASIC's role.
The government has also indicated it is considering structural options, including "breaking up the Big Four," following a series of high-profile controversies.
Background
- KPMG Australia has been accused by a whistleblower of using confidential client information to win lucrative work.
- PwC Australia was involved in a scandal around three years ago involving the sharing of confidential government tax data with prospective clients.
ASIC said it would continue its "significant investigation into specific allegations of misuse of client confidential information at KPMG."
Legal Constraints
The regulator also highlighted constraints in its current legal powers over partnership-structured audit practices, noting that these differ from its wider authority over corporations, including listed entities.
Credit: Mehaniq/Shutterstock.com
This article was originally created and published by The Accountant, a GlobalData owned brand.
Source
Yahoo FinanceWestern
Part of this Story
Australia considers breaking up Big Four accounting firms after scandals