KPMG Australia's response to a whistleblower complaint has come under intense scrutiny after a parliamentary inquiry heard that the matter was initially treated as an employment issue, with the firm's human resources team becoming the first point of contact, according to Accounting Times.
During the inquiry into KPMG Australia's ethics and professional accountability, former national managing partner of audit assurance, Julian McPherson, acknowledged that he went to HR after learning of the whistleblower complaint.
Questioning the firm's response, Senator Deborah O'Neill said, “I’m a little shocked that the first person you went to was Human Resources, which is often, people know, a way of managing people with a problem … you looked at this and you went, oh, this guy’s a problem.”
Former chief executive Andrew Yates also told the inquiry, “My recollection is that these issues were presented to me in the context of the employment matters.”
Allegations overlooked
O'Neill mentioned that the focus on employment issues appeared to overshadow the seriousness of the whistleblower's allegations.
Referring to evidence that later supported some of the claims, Yates said, “Up until the date of the document that was discovered on the 21st November, I think the way that I talked to the team about this was about the employment elements of the challenge, and I could see that it was escalating.”
The Australian Greens echoed those concerns in a statement, saying the central failing in KPMG's response was that the complaint had been handled primarily as an HR matter rather than a governance and ethics issue.
Protection concerns
The inquiry has reignited debate around whistleblower protections and corporate accountability, with governance experts calling for organisations to strengthen their internal processes.
Speaking to Accounting Times, Kieran Pender, associate legal director at the Human Rights Law Centre, said, “Chief financial officers and other corporate leaders play a key role in ensuring that whistleblowers in their organisations are protected, and not punished.”
He added: “These frameworks should include effective and accessible procedures and policies, as well as facilitate trauma-informed disclosure mechanisms, training on whistleblower protections for all staff, and adequate support for whistleblowers.”
UNSW School of Accounting, Auditing and Taxation professor Gary Monroe said whistleblowers are frequently sidelined after raising concerns.
“Often they’re ostracised; they're treated very poorly at work. Often they leave the firm…in many cases they're fired or they're given demotions or no work to do, etc. So they're definitely not being treated as if they've done the right thing, when in fact … in many cases … they have done the right thing,” Monroe said.
Swaab partner Michael Byrnes said organisations should already have robust systems in place to manage whistleblower complaints and protect those who come forward.
Reforms underway
The inquiry comes as the Australian Treasury continues consulting on reforms to the regulation of accounting, auditing and consulting firms, with submissions open until 12 August.
KPMG is actively participating in the consultation process and supports measures aimed at improving governance, transparency, auditor independence and regulatory oversight.
The firm also reiterated its backing for stronger accountability measures, enhanced governance standards and tighter restrictions on non-audit services as part of broader efforts to strengthen public confidence in the profession.