The whistle that blew away KPMG’s aura as the guardians of financial credibility

The accounting and consulting giant became embroiled in scandal after whistleblower allegations of illicit sharing of data.

Sydney’s rejuvenated harbour front precinct, Barangaroo, offers some of the most expensive real estate in the country. The offices of Australia’s business elite are nestled in just a stone’s throw from rich-lister neighbours sitting atop Crown’s Sydney casino.

To be able to afford office space in this precinct, you have to do something very lucrative, very well.

For Australia’s multi-billion dollar consulting industry, which provides two significant tenants at Barangaroo, it is providing the audit work that every Australian business must get to assure everyone that their financial accounts are credible.

Everyone with an investment or a super fund relies on their important work.

The implosion of former $2.3 billion sharemarket giant Corporate Travel Management, after its auditors discovered it had overcharged the British government as much as $240 million, is a case in point. As the Australian travel company’s woes have deepened, some have slashed their valuation of the business to zero.

Sensitive government departments such as the tax office and the federal police all use auditors’ services extensively.

For KPMG, one of the largest tenants in the multi-billion-dollar Barangaroo development, it underlines the fact that their financial superpower is a reputation for integrity, independence and iron-clad confidentiality.

You don’t need much imagination to understand what happens when this reputation gets tarnished.

KPMG’s Barangaroo neighbour and rival, PwC, shed lucrative clients and hundreds of staff and it was forced to spin off its entire government business for $1 after a tax leaks scandal erupted in 2023 alleging the firm had used confidential government tax plans to help recruit new clients.

In this context, it is easy to understand why it has taken two years for explosive claims by a former employee turned whistleblower to surface publicly. Critics allege KPMG has been too slow to investigate the allegations, to say the least.

Last week, the scandal cost KPMG Australia boss Andrew Yates his job. The same goes for audit boss Julian McPherson. Yates and McPherson have abruptly resigned after the company confirmed confidential client data had been shared and potentially used to win new business with other clients.

This week, the carnage continued when Yates’ heir apparent Eileen Hoggett stepped down from executive duties while an investigation into the scandal continues.

Lendlease – which has had KPMG as its auditor s