Australian politicians have condemned KPMG’s explanation for secretly searching a whistleblower’s laptop, questioning why the firm appeared more concerned about protecting its own information than investigating allegations of misconduct.
Julian McPherson, KPMG Australia’s former head of audit, told a parliamentary inquiry in Canberra that he authorised the first search on 30 May 2024 — the same day the employee raised concerns about colleagues’ conduct and alleged retaliation.
Mr McPherson said the search was ordered because executives feared the whistleblower might take confidential KPMG material while pursuing employment elsewhere. The explanation prompted sharp questioning from MPs, including Labor member Tania Lawrence.
The inquiry heard that the whistleblower had alleged confidential client information was being used in bids for lucrative audit contracts. The claims involved clients including Lendlease, Optus, Dexus and Westpac.
Rather than immediately treating the complaint as a protected disclosure, Mr McPherson said he initially referred it to KPMG’s human resources department before consulting the firm’s legal team.
Further searches of the employee’s computer were carried out on 21 and 26 November 2024. Former chief executive Andrew Yates later told the committee that material found during those searches supported allegations that had not previously been raised, prompting KPMG to begin a fresh investigation.
Senators have questioned why the firm searched the whistleblower’s computer covertly while failing to act decisively on the allegations. They have also criticised KPMG’s reliance on employment and legal processes, arguing that the complaint was treated as a personnel problem rather than a potential ethics breach.
Mr Yates acknowledged that KPMG had not handled the matter appropriately and said the whistleblower had not been made to feel comfortable during the process. He also said the employee had suffered a serious personal and professional impact.
The controversy has formed part of a wider inquiry into KPMG’s handling of confidential client information. The firm has faced further criticism after parliamentary documents indicated that lawyers reviewing the complaint were not given all the relevant material.
Mr McPherson, Mr Yates and former KPMG chairman Martin Sheppard have since left the firm amid the scandal. The parliamentary committee is continuing to examine the conduct of KPMG’s senior executives and the wider regulation of Australia’s accounting profession.
