'Taken for mugs': KPMG referred for corruption probe
By Kaaren Morrissey
June 16 2026 - 2:43am
A "big four" consultancy firm holding more than half a billion dollars in taxpayer-funded contracts has been referred to the corruption watchdog ahead of a mammoth inquiry into its conduct.
KPMG is being pursued by the federal parliamentary panel over its alleged misuse of client information to win audit work and the mistreatment of a whistleblower.
On Friday, the Joint Committee on Corporations and Financial Services will hear from at least 31 witnesses, including 14 KPMG leaders such as chair Martin Sheppard and interim Australian boss Stan Stavros.
An unnamed "senior employee who oversaw (an) internal KPMG investigation" is also in the line-up.
On Monday, four days ahead of the hearing, the Department of Finance placed a moratorium on KPMG bidding for any new contracts until September 30.
The department is also setting up an independent review to examine the consultancy firm's governance, culture, ethics and integrity frameworks.
But the firm's nearly 300 current government contracts remain, due to the legal standing of the agreements and pending the outcome of the probe.
That wasn't enough for Greens senator Barbara Pocock, a member of the committee, who on Monday referred KPMG to the National Anti-Corruption Commission for alleged "corruption breaches".
The federal government has 297 active contracts with KPMG valued at $653 million, according to parliamentary library data.
Of these, 31 totalling $24 million were sealed with government departments after the KPMG scandal spectacularly hit the headlines in late May, Senator Pocock said on Tuesday.
"A three-month freeze on new contracts is a slap on the wrist with a stick of limp celery," she said.
"There is no ban on extensions to the current 297 contracts and we know the big four make their real money in contract extensions."
The senator's referral alleges multiple breaches of the commonwealth supplier code of conduct.
"If this was an ordinary worker ... using confidential information for gain, cheating on an exam or mistreating a whistleblower - you'd be out on your ear, you'd be dismissed in a flash," she said.
"We're being taken for mugs."
Finance Minister Katy Gallagher earlier warned that firms working with government departments must uphold the highest ethical standards.
"We're concerned about issues and allegations that have been raised and are responding in a very strong way," she said.
The furore surrounding KPMG exploded during a May 29 hearing before the committee as it examined the work of the corporate regulator.
A tabled letter from Lendlease chief executive Tony Lombardo revealed KPMG personnel on an audit team in 2023 retained and used material from the major developer's board papers to inform their tender for a Westpac audit.
KPMG immediately announced its Australian head, Andrew Yates, had resigned, along with audit head Julian McPherson.
Mr Yates took the fall over the treatment of a whistleblower after a KPMG internal investigation into their allegations was found to have fallen short of the firm's expectations.
The committee also heard that the Australian Securities and Investments Commission began a preliminary investigation into the conduct of at least three KPMG-registered auditors in April.
KPMG on Monday described the moratorium on new Department of Finance contracts as a "voluntary" agreement.
"We welcome the independent review," Mr Stavros said in a statement, adding the firm understood its obligations while supporting the work of the public service.
Multiple state governments have also raised concerns about the KPMG furore.
Australian Associated Press
