A new analysis has revealed a significant presence of KPMG alumni in board and executive roles at ASX-listed companies that also retain the global accounting firm as auditor. KPMG, which provides audit, tax, and advisory services to ensure financial accuracy and compliance, counts at least 30 former staff in such positions. This figure considerably surpasses its peers, with EY having at least 19 alumni on audit client boards, PwC 16, and Deloitte 13. The Australian Financial Review analysis, based on over 6,500 ASX board member biographies, raises questions about potential conflicts in audit contract awards.
Prominent examples include former KPMG chairman Peter Nash, who resigned from Westpac’s board citing a “perception of bias” during KPMG’s pitch for the bank’s audit contract. Similarly, Michelle Hinchcliffe joined Macquarie Group’s board in 2022 following a 37-year KPMG career, with Macquarie awarding KPMG a substantial annual audit contract last year. These examples are highlighted amidst a KPMG whistleblower’s allegations of data misuse and leveraging insider information, which led to the departure of the firm’s chief executive, chairman, and several senior auditors. The corporate watchdog, ASIC, has since launched an investigation into audit firms’ internal complaint handling.
This growing scrutiny is further underscored by a report from shareholder advocacy group Ownership Matters, noting KPMG audits 69 ASX 300 companies, with $281 million in aggregate audit fees. The report advocates for greater regulation, including mandatory audit firm rotation, citing potential long-term benefits for audit quality and independence. Echoing these concerns, a Treasury position paper, released by Assistant Treasurer Daniel Mulino, highlighted “strong and compelling evidence” for tougher regulation of the “Big Four” accounting firms. The paper proposed measures like mandatory disclosure of auditor tenure, requiring auditor tendering after 10 years, and rotation after 20 years, aligning with EU and UK practices. Public submissions for these reforms close on August 12.
