KPMG Australia mishandled whistleblower claims; government work pause extended
An independent review by former bureaucrat Ian Watt found KPMG Australia mishandled whistleblower allegations of client data leaks; the firm has agreed not to bid for new federal work until February next year.
KPMG Australia mishandled whistleblower allegations that staff leaked client data to win new audit contracts, and let cultural and governance weaknesses persist for years, an independent review released on Thursday found.
The review, led by former bureaucrat Ian Watt and commissioned by Australia’s Department of Finance, stopped short of recommending a permanent ban on the firm from federal government work. Instead, KPMG has agreed not to bid for new Commonwealth work until February next year while it undertakes further governance reforms, extending a pause in place since June.
“KPMG mishandled the whistleblower matter. Its response was misguided, fragmented, prolonged and, at critical points, lacked clear ownership,” the report said.
The whistleblower alleged staff misused confidential information to bid for new audit contracts. Despite the whistleblower raising concerns of unethical conduct arising from commercial pressure and a fear of retaliation, KPMG primarily treated the matter as an “employment matter”, focusing on legal implications and organisational risks while paying “inadequate attention to whether the allegations might be accurate”.
“The review considers that KPMG should not be treated as permanently unsuitable for Commonwealth work, but nor should confidence be restored on the strength of assurances and encouraging early signs alone,” the report said.
Since the scandal became public in March, KPMG has lost major blue-chip clients and replaced key leaders including its chief executive, chairman and audit chief. KPMG did not immediately respond to a request for comment.
Source: Reuters
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