Macquarie director met senior KPMG staff 3 times during audit tender

Macquarie made the revelations in its responses to questions taken on notice during the Parliamentary Joint Committee on Corporations and Financial Services' KPMG ethics and accountability public hearing on Friday (14 August), where Macquarie Group chairman Glenn Stevens and chief financial officer Frank Kwok appeared before the committee.

At the KPMG ethics and accountability public hearing, Greens senator Barbara Pocock asked Stevens if he had ever questioned Hinchliffe – who is Macquarie Board Audit Committee Chair – about any contact she had with KPMG senior figures while the accounting firm was vying for Macquarie’s $75 million auditing contract.

Pocock pointed out that Hinchliffe was a partner at KPMG for 37 years up to February 2022 in the UK and Australia, and joined Macquarie a month after leaving that long tenure at KPMG.

Stevens said he has not put that question to her, adding that he is “assuming” the answer would be “no” because there were protocols around how senior personnel conducted themselves during the audit tender process.

“There were protocols which applied to the board and to the management on what could happen during the tender, the formal tender period, which was March to November of 2025. I'm unaware of any contact that she would have had in that period,” Stevens told Pocock during the hearing.

Hinchliffe had several interactions with KPMG

In response to the questions taken on notice, Macquarie wrote that Hinchliffe said she recalls meeting KPMG pitch team personnel three times during that period.

On the first occasion in March 2025, Hinchliffe and her husband were scheduled to have dinner with KPMG director and “personal acquaintances” Charles Hatchman and his wife. However, his wife was unwell and unable to attend, but Charles Hatchman visited the restaurant briefly to excuse them both from dinner, Macquarie said.

Then, in May 2025, Hinchliffe met former KPMG chairman Martin Sheppard in her capacity as a non-executive director at BHP Group. In the same month, she and her husband shared a meal with KPMG Australia audit partner Patricia Stebbens and her daughter.

Sheppard resigned this year (along with several other senior executives) in response to revelations of mishandling confidential client documents and the alleged mistreatment of the whistleblower who raised allegations of audit misconduct at KPMG.

Hinchliffe also recalled a phone call in a personal capacity with KPMG UK chief risk officer Richard Faulkner, and meetings in her capacity as a non-executive director of Santander UK Group Holdings with KPMG International global head of financial services Karim Haji and KPMG UK partner Mark Cordy.

Furthermore, Hinchliffe had contact with KPMG pitch team members through her attendance at presentations to Macquarie management and to the Macquarie board during the Macquarie audit tender period.

Macquarie noted that she recused herself from any scoring of the firms and from the decision to appoint KPMG.

In March this year, Accounting Times reported that senator Deborah O’Neill aired allegations of misconduct from a KPMG whistleblower in relation to the firm’s audit independence, misuse of confidential information, and tender integrity failures.

The whistleblower also raised “serious concerns” about the independence of KPMG’s tender process in pursuit of Macquarie’s audit contract because Hinchliffe was allegedly “centrally involved” in the process.

In June, The Australian Financial Review reported that Hinchliffe personally attended early-stage bid meetings in Sydney and London when EY pitched Macquarie’s executives for its audit. It further reported that EY executives were shocked that she was present, where she asked questions and took detailed notes.

‘Big 4 governance is a farce’, says senator

Responding to the latest revelations by Macquarie about Hincliffe’s proximity to senior KPMG executives, Pocock said it raises a clear conflict-of-interest issue.

“Wining and dining with prospective clients during a tender bidding process looks like privileged access and influence to most people,” Pocock said in a statement to Accounting Times.

“If KPMG secures audit work after entertaining a prospective client who is a former KPMG partner, it is fair to ask whether the same standards are being applied to everyone. Auditor independence rules exist for a reason; winning auditing contracts should not depend on who you know, how often you have dinner with them, whether you know their spouse, or what corporate boxes you have cohabitated.”

She called for “root and branch structural reform” at the large accounting and auditing firms.

“The big four’s governance is a farce. They have lost their social licence, and they cannot be trusted. Self-regulation has failed,” Pocock said.

Macquarie satisfied with its audit tender process

Last week, Macquarie Bank announced it will no longer recommend KPMG as its future auditor at its 2027 annual general meeting. It will instead continue its engagement with PwC for auditing services, it said.

“The boards currently hold concerns in respect of KPMG Australia and its audit practice in two of the key criteria considered in the audit tender completed in late 2025, namely capacity to deliver the audit given several key members of the proposed KPMG Australia audit team have departed; and culture, including a culture that transparently discloses issues,” the group said in a statement.

In its responses to questions on notice, the group said its decision to no longer recommend KPMG as its preferred auditor followed ongoing scrutiny of KPMG’s audit practice, including information revealed at the hearing in August.

“It also follows Macquarie’s formal enquiries of KPMG to consider its capacity to deliver the audit, as well as the nature and impact of ongoing issues at KPMG Australia,” Macquarie said.

However, it added that Macquarie is confident in the way it ran its tender process for the audit contract.