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FinanceKPMG Australia COO resigns amid client data misuse allegations
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KPMG Australia's Chief Operating Officer Eileen Hoggett has resigned amid whistleblower allegations that the firm misused confidential client data from Lendlease to secure audit work with Westpac and Dexus. The allegations, raised by Senator Deborah O'Neill in parliament, claim that lead partners took Lendlease board papers and secured them in Hoggett's locker. KPMG's initial internal review did not uphold the claims, but interim CEO Stan Stavros acknowledged the complaints should have been handled differently. The firm has appointed law firm Allens to conduct a new external investigation. The New South Wales and Victorian governments are reviewing their contracts with KPMG over data misuse concerns. A parliamentary hearing is scheduled for June 19. The case adds pressure on Australia's professional services industry, already strained after PwC's 2023 confidential data sharing scandal.
Source report
By: Ellichipuram Umesh Source: International Accounting Bulletin
KPMG Australia's Chief Operating Officer (COO) Eileen Hoggett has resigned as scrutiny intensifies over whistleblower claims that the firm misused confidential client data to secure audit work.
In an internal email to staff, shared with Reuters, interim CEO Stan Stavros confirmed that Hoggett has stepped down from the COO role while inquiries are ongoing. She will remain with the partnership as an audit partner.
Hoggett, who was named in the whistleblower's allegations, was appointed COO in 2023. Her resignation follows the recent departure of KPMG Australia's CEO and head of audit, after criticism over how the company's initial internal review of the whistleblower claims was handled.
KPMG had previously stated that its internal investigation did not support the whistleblower's allegations, which were also provided to a senator from the ruling Labor Party.
In March, Senator Deborah O'Neill told parliament that the allegations included claims that confidential Lendlease board papers were used to support KPMG bids for major audit mandates with Westpac and Dexus.
O'Neill was quoted by the news agency as saying:
"Documents were taken from Lendlease by the [KPMG] lead partners on the account, Eileen Hoggett and Paul Rogers, and were physically secured in Ms Hoggett's locker."
The case has added pressure on Australia's professional services industry, which was already under strain following 2023 disclosures that PricewaterhouseCoopers shared confidential government material with prospective clients.
Stavros told staff that the company should have handled the whistleblower's complaints differently. KPMG has now appointed law firm Allens to conduct a new external investigation.
The New South Wales Government said it has sought assurances from KPMG regarding its handling of confidential information and whether any staff under investigation are involved in state contracts.
The Victorian Government is also reviewing its contracts with KPMG to ensure that confidential data has not been misused, according to the Australian Financial Review. A parliamentary hearing on the whistleblower's allegations is scheduled for June 19.
This article was originally created and published by International Accounting Bulletin, a GlobalData owned brand.
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KPMG Australia CEO and Audit Head Resign Over Whistleblower Scandal