[Australia] KPMG’s ‘naughtiest kids’ turn on their own
Aug 14, 2026
Each time the firm tries to move past the scandal, it somehow makes it worse. Friday’s hearing was no exception.
The longer KPMG’s audit misconduct scandal drags on, the more the firm resembles a schoolyard rather than a professional organisation tasked with delivering a systemically vital service to financial markets.
This was on clear display during Friday’s hearing of a parliamentary committee’s inquiry into the whole mess, which centres on a whistleblower’s allegations that KPMG misused confidential client data and leveraged compromised relationships to win new work.
The senior partners and executives appearing on behalf of KPMG were split into multiple groups, largely divided by those who had lost their jobs because of the scandal and those who had not.
Regardless of category, they all filed into the committee with the startled look of usually well-behaved kids who had unexpectedly been pulled into the principal’s office (if school students wore near-identical navy-blue suits that is).
They were also about as defensive.
The firm’s former chief operating officer, Eileen Hoggett, kicked things off, responding to questions as to why she had stored printed copies of confidential Lendlease board documents in her locker, shared them with her colleagues to win audit contracts, and repeatedly lied about it.
Except, according to Hoggett – described by Labor senator Deborah O’Neill as “the naughtiest kid at the table” – she hadn’t lied.
She was “very regretful that this new information has only come to light in the last couple of weeks” and took “full responsibility” for whatever role she “might have played in that”.
But she had “not been dishonest at all through any of the investigations”. What’s more, she was still “trying to ascertain” why she had been sacked over the incident.
Never mind the fact lawyers from Allens investigating the allegations had found an email in which she told her assistant that another colleague could get those documents from her locker, provided they did so “confidentially”.
Then there was soon-to-be-ex audit partner Kim Lawry. Evidence around her use of the Lendlease documents was also belatedly discovered by Allens, this time in the form of a photo of information contained in them.
Lawry said she couldn’t remember why she had the photo. But no matter – it wasn’t a breach of her duties as it did not contain anything useful for her work trying to win Westpac’s audit contract.
Her voice wavered throughout her testimony, as she laid out how she had never been in trouble before.
‘Wins forgive sins’
Former chairman Martin Sheppard kept inexplicably referring to any wrongdoing related to him in the third person.
His successor, Michael Ebeid, couldn’t quite spell out why he was independent enough to lead the firm out of the crisis, given his involvement in its earlier mismanagement.
But then came the bombshell, delivered by deputy general counsel James McClelland. He accused (unnamed) colleagues of lying to him in his initial investigation into the allegations, which cleared KPMG of wrongdoing.
“The work that I undertook was fundamentally undermined by the answers … which were misleading, if not directly deceptive to the questions that I asked,” said McClelland. “The truth was not told in those interviews.”
Who is telling the truth here is unclear. McClelland still has a job at KPMG, so it’s a bold move to turn on his employer either way.
There’s a saying within KPMG that “wins forgive sins”.
On Friday, the firm’s sins were on clear display. Unfortunately for the witnesses, so too was the fact that none of them have won as a result.
[Australian Financial Review]
