KPMG referred to corruption body amid federal contract ban

Further to recent coverage of the potential preclusion of KPMG from Commonwealth contracts, the big four firm agreed on 15 June to halt federal government bids for at least three months following a request from the Department of Finance, during which time an independent review will be conducted.

A department spokesperson said: “Between 16 June and 30 September 2026 KPMG will temporarily cease new contract engagements with Australian Government entities subject to the Commonwealth Procurement Rules (CPR), with non-CPR entities recommended to adopt a consistent approach.”

“During this timeframe, Finance will commission an independent review of KPMG’s governance, culture, ethics and integrity frameworks.”

In recognition of the agreement, interim chief executive Stan Stavros said: “We welcome the independent review.”

“We acknowledge that individuals in our firm have made mistakes. But those failings do not reflect the overwhelming majority of our partners and people”.

“We are focussed on finalising a clear and robust Remediation Plan, which we are committed to implementing in full. The plan will address the key areas where we fell short of expected standards.”

“KPMG has continued to work openly with our government clients, and we are liaising closely with the Department of Finance on these matters.”

“We will fully cooperate with the Department of Finance review of KPMG Australia. We will continue engaging with each State and Territory under the relevant supplier codes and keep them informed of our remediation progress.”

Long-time KPMG client and alleged victim of internal data breaches, Lendlease, cut ties with the auditor and ended its 68-year relationship on 15 June.

It followed an admission on 29 May by KPMG chairman Martin Sheppard regarding the mishandling of confidential documents and the internal investigation into the whistleblower’s claims.

Sheppard said: “KPMG apologises to the clients whose information was not handled with the care and respect they expect from us.”

29 May proved to be a seismic day for the firm as it also saw the formal resignation of chief executive Andrew Yates and national managing partner of audit and assurance, Julian McPherson.

In its 15 June ASX announcement, the statement read: “Lendlease advises securityholders that the Board has resolved to change the auditor for the Group. This change will begin after the conclusion of reporting for the 2026 financial year end, at which time Lendlease will commence the necessary process in accordance with requirements under the Corporations Law and ASX Listing Rules.”

Further to its staunch criticism of Labor’s handling of the ongoing scandal, the Greens yesterday (16 June) referred KPMG to the National Anti-Corruption Commission (NACC) “because the government is too deep in contracts worth millions to be able to act independently”, according to the party’s finance and public service spokesperson, senator Barbara Pocock.

“Labor has rose coloured glasses for the big four even when they behave unethically,” Pocock said.

“A three month freeze on new contracts is a flap on the wrist with a stick of limp celery. There is no ban on extension to the current 297 contracts and we know the Big 4 make their real money in contract extensions – who can forget the BoM’s $96 million website bungle.”

“Three months is a holiday, not a punishment. It shows how much power KPMG has over the government,” Pocock continued.

“When will Labor show a bit of backbone and call these marauding cowboys to account?

“It is time to implement the recommendations of earlier inquiries: subject these massive partnerships to the same rules of tax, transparency and whistleblowing as other large entities through corporations law, separate the functions of consultancy from the audit and regulate them properly.”

Following intense dissection of allegations by the Parliamentary Joint Committee on Corporations and Financial Services as details emerged, this week’s upcoming (19 June) public hearing is likely to ramp up the pressure on an already fragmented firm, with numerous high-profile representatives of the profession set to appear.