Why chairman, senior partners of KPMG Australia have resigned
What's the story
KPMG Australia's Chairman Martin Sheppard and two senior partners, Paul Rogers and Eileen Hoggett, have announced their resignations. The move comes as the firm tries to contain a growing scandal over allegations of misuse of confidential client information. Interim CEO Stan Stavros said in a statement that "the decisions announced today are necessary and immediate." He admitted they had failed to meet expected standards and acknowledged the impact this had on various stakeholders.
Scandal
Scandal details and investigation
The whistleblower alleged that KPMG misused confidential board papers from real estate company Lendlease to support bids for major audit tenders. Rogers and Hoggett were named by the whistleblower as the lead partners on the Lendlease auditing team involved in this misconduct. Both are now under investigation by Australia's corporate regulator, with KPMG admitting it mishandled the complaint and launching a fourth probe into these allegations.
Reform initiatives
Governance overhaul at KPMG Australia
In light of the ongoing scandal, KPMG Australia has announced plans to overhaul its governance and rebuild trust. These include appointing an independent chair and adding independent members to the Australian board. The firm also plans to review sanctions for staff misconduct. This comes after Sheppard testified at a parliamentary committee examining the scandal, where he revealed that KPMG staff shared sensitive information about telecom firm Optus with another internal team bidding for an audit contract for its rival Telstra.