KPMG Australia Chairman and Senior Partners Resign Over Whistleblower Scandal

KPMG Australia’s chairman Martin Sheppard and two senior audit partners have resigned as the firm struggles to contain one of the most damaging whistleblower scandals to hit the Big Four accounting network in recent years.

The departures mark the latest casualties in a controversy centred on allegations that senior staff misused confidential client documents to chase new business, raising serious questions about ethical standards and client trust at the firm.

Interim CEO Stan Stavros described the resignations as “necessary and immediate,” admitting the firm had fallen short of expected standards. The exits follow those of former CEO Andrew Yates and national audit head Julian McPherson in late May.

The core allegations surfaced internally in May 2024 when a former executive claimed that audit partners Paul Rogers and Eileen Hoggett, who worked on the long-standing Lendlease account, had shared sensitive board papers with other teams to strengthen pitches for major clients including Westpac, Dexus, and Macquarie Group. Lendlease was reportedly never informed. Similar claims involved the alleged sharing of Optus audit information to pursue work with Telstra.

The whistleblower’s concerns gained fresh public attention during a tense parliamentary hearing on June 19, triggering further scrutiny and resignations. KPMG has since launched its fourth investigation into the matter, brought in external experts including law firm Allens, and appointed Principia Advisory to examine its internal “speak-up” culture. The firm has apologised to the whistleblower, who has publicly said they faced retaliation and would never raise concerns again.

Australia’s corporate regulator ASIC has opened a formal investigation into the firm and the named partners, who were stood down from key accounts. Clients have reacted sharply. Lendlease announced it will not renew its decades-long relationship with KPMG once current work concludes. The federal government has placed a moratorium on new contracts with the firm until the end of September while an independent review of its governance and culture is carried out.

In response, KPMG is accelerating governance changes. Sheppard will leave after a short transition period, to be replaced by an independent chairman, with more independent directors added to the Australian board. The firm is also reviewing how it disciplines staff misconduct.

The scandal echoes the 2023 PwC tax leaks crisis that severely damaged public trust and led to a sharp reduction in government work for the Big Four. Lawmakers have begun questioning whether self-regulation is sufficient for firms entrusted with highly sensitive financial data, with calls growing for stronger external oversight.