Wire flash
FinanceKPMG Australia CEO resigns over whistleblower scandal
Editorial responsibility
- No named human review is recorded for this page.
- Source reporting is collected, normalized, translated or condensed automatically when needed.
- Automatically published source-backed update
The CEO of KPMG Australia, Andrew Yates, and the national managing partner of audit and assurance, Julian McPherson, have resigned after the firm admitted to severely mishandling a whistleblower report about client confidentiality breaches. The whistleblower alleged that client documents were inappropriately shared with senior leadership, including the CEO. An initial internal investigation did not substantiate the claims, and an external law firm supported that outcome. However, after further complaints, a second external law firm, Allens, was appointed and is conducting an ongoing investigation. KPMG acknowledged its treatment of the whistleblower and the probe 'fell short' of expectations. Chairman Martin Sheppard apologized unreservedly to the whistleblower and affected clients. The firm will engage an ethics consultant to review its 'speak-up culture' and publish findings. Interim CEO Stan Stavros has been appointed while a permanent successor is sought.
Source report
The chief executive of KPMG Australia has resigned after the firm admitted to severely mishandling a whistleblower report concerning client confidentiality breaches.
Background of the Scandal
The controversy began when a whistleblower alleged that client documents were inappropriately shared with the senior leadership team, including the chief executive. This prompted an internal investigation, which did not substantiate the claims. An external law firm also supported that outcome.
However, after the whistleblower raised further complaints with the board, a different external law firm, Allens, was appointed to conduct another investigation. That investigation is ongoing.
Resignations
On Friday, the firm released a statement confirming that its treatment of the whistleblower and the investigation "fell short" of the firm's expectations.
As a result, chief executive Andrew Yates and the national managing partner of audit and assurance, Julian McPherson, have resigned effective immediately.
In his statement, Yates said: "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."
McPherson added: "Matters have arisen for which I am responsible, and I take accountability."
Board Response and Interim Leadership
The board appointed Stan Stavros as interim chief executive of KPMG Australia while continuing its process to appoint a permanent successor to Yates.
Chairman Martin Sheppard issued a lengthy apology, saying the firm "apologises unreservedly."
"KPMG apologises to the clients whose information was not handled with the care and respect they expect from us. We also apologise to our people, as these matters do not reflect on the contribution they make to KPMG and our clients," Sheppard said.
Remedial Actions
Sheppard added that KPMG would engage an ethics consultant to review its "speak-up culture" and has promised to publish the findings.
The Big Four firm is now:
- Contacting affected clients
- Reinforcing data controls
- Reviewing audit clients to ensure these conduct issues did not impact audit quality
"We acknowledge we have work to do to rebuild trust. That's why we are not asking anyone to take our word for it, and we are inviting scrutiny and challenge on our remedial actions," Sheppard added.
The findings have been shared with impacted clients, professional bodies, regulators, and the Parliamentary Joint Committee.
Previous Controversy
The firm was in the headlines in February after a KPMG Australia partner was fined $10,000 for using AI to cheat in an internal training course meant to test knowledge of the technology.
Source
City AMWestern
Part of this Story
KPMG Australia CEO and Audit Head Resign Over Whistleblower Scandal