IAG, KPMG’s $11.6m partnership ends after tenure consideration

IAG has decided to open its external audit tender process in FY27 after engaging KPMG as its auditor since it was listed on the ASX in 2000.

The 26-year partnership will end after IAG said in a statement on Friday (18 September) that, after considering auditor tenure, it has decided to move on from its engagement with the firm.

According to IAG’s FY26 financial report, it paid KPMG $11.576 million for its services as auditor, with $9.587 million for audit services and the remainder for assurance and other services.

“IAG has been well served by KPMG as external auditor since the company’s ASX listing in 2000, with a long-standing practice of regular lead audit partner rotation,” IAG said in its statement last week.

“The decision to conduct a tender reflects the Board’s consideration of auditor tenure. With the focus on tenure, KPMG will not be invited to participate,” it added.

“IAG intends to run the tender process during FY27. In accordance with Sections 329 and 327D of the Corporations Act 2001 (Cth), shareholders will be asked to approve the appointment of the successful audit firm in due course.”

Since the inception of the Parliamentary Joint Committee investigation into KPMG following Senator Deborah O’Neill revealing allegations made against the firm by a whistleblower in March this year, KPMG reported a 16.9 per cent year-on-year decrease in revenue for the firm’s consulting business, and subsequently let go 27 partners and around 360 employees in its consulting and business services divisions in August.

IAG’s move to exclude KPMG from its next external audit tenure follows Macquarie Bank’s board decision to no longer recommend KPMG at its 2027 annual general meeting, and it continued its engagement with PricewaterhouseCoopers (PwC) for auditing services that same month.

KPMG declined to provide comment.