KPMG whistleblower accuses ASIC of ignoring misconduct allegations

A KPMG whistleblower says the Australian Securities and Investments Commission (ASIC) has to be "dragged kicking and screaming" to investigate alleged misconduct disclosures at the accounting firm.

The regulator is being hauled before Friday's parliamentary inquiry, which is investigating how KPMG audit partners allegedly misused client data and then mishandled a whistleblower's complaint about it.

The inquiry has since heard from other whistleblowers at KPMG and other big four firms.

ASIC is expected to face tough questions about how it has responded to whistleblowers making, or attempting to make, disclosures about alleged misconduct at accounting firms.

In December 2021, another KPMG whistleblower wrote to ASIC about separate claims that the firm may have breached corporations law.

In an email to ASIC in June, the whistleblower detailed how ASIC rejected their earlier attempt at making a disclosure, alleging non-compliance by KPMG over audit transparency, and accusing the regulator of taking a "condescending tone" in communication with them.

This, the whistleblower said, "reflects a very poor attitude to whistleblowers and whistleblowing" at ASIC.

"What has become increasingly — and I think close to undeniably clear — is that an improper state of affairs exists in relation to 'regulated' KPMG entities, and that this state has existed for some time.

"That is, KPMG benefits from improper regulatory restraint, or potentially curtailment, by ASIC, which appears to be in part due to an improper relationship with ASIC."

Lack of oversight could 'encourage misconduct'

The whistleblower expressed concern that there could be a situation where another "already existing regulator will compensate for ASIC, which is neither their job nor a desirable thing".

"ASIC has repeatedly had occasion to turn its mind to investigating contraventions of the corporations law by KPMG that it knows about and/or has evidence of," the email said.

The whistleblower claimed that ASIC had "substantially done nothing bar tacitly endorse and further encourage misconduct".

"Those choices are stark given the inclusion of auditor misconduct in ASIC's stated regulatory priorities for both 2025 and 2026!" the whistleblower wrote.

"ASIC is fixated on denying whistleblowers any substantial regulatory response, instead essentially requiring them to cause disclosable conduct to be exposed publicly in other ways if they wish to see it dealt with."

An ASIC spokesman told ABC News:

"ASIC takes all whistleblower reports and allegations of misconduct seriously.

"ASIC assesses and progresses matters in a timely and methodical manner to determine the appropriate response.

"ASIC encourages people with information about potential misconduct to come forward and will carefully and confidentially consider all information received through its whistleblower and misconduct reporting channels."

ASIC has previously told the parliamentary inquiry it would review "how auditors are complying with important systemic requirements". This includes how firms comply with requirements under the Corporations Act, as well as "ethical and independence requirements".

"At the same time, ASIC continues its enforcement focus on auditor misconduct and will continue to take action against those who break the law," ASIC told the inquiry in written correspondence.

"There are a number of investigations and enforcement actions underway."

Call for better whistleblower protections

The Greens' finance and public service spokesperson, Senator Barbara Pocock, who sits on the parliamentary inquiry looking into the audit leaks scandal, told ABC News whistleblower complaints needed to be taken seriously.

"Whistleblowers risk everything: they suffer huge personal, professional and financial costs for doing the right thing in exposing unethical behaviour."

Senator Pocock said whistleblowers should not have to rely on parliamentary inquiries to be heard.

"We need a whistleblower authority and regulators who have legislated obligations to respond appropriately to whistleblowers — including regulators like ASIC, the TPB and so on," she said.

"Until the government reforms the big-four partnerships, these firms will continue to self-regulate, play by their own rules and fail to protect whistleblowers."

The federal government is currently considering an option to split accounting firms' auditing and consulting arms.

Senator Pocock said ASIC was signing new contracts with KPMG at the same time the KPMG scandals became public in March 2026.

"Meanwhile, the current chair of the Tax Practitioners Board [Peter de Cure] is a former partner at KPMG who worked there for 25 years," she said.

"We need regulators with the legal backing, resources and guts to listen and act. Lately, the regulatory system has failed. Every part of it needs to do better."

KPMG's 'transparency' reports omit mention of audit complaint

A spokesperson for KPMG told the ABC the firm was "progressing work to address integrity issues, strengthen accountability and rebuild trust".

KPMG had launched an action plan in June and the "new leadership is absolutely focused on delivering the Action Plan".

KPMG is required to disclose how many whistleblower complaints related to audit quality are received each financial year. The firm's 2024 and 2025 reports suggest this number was zero.

KPMG classified the audit leaks whistleblower complaint to the firm in May 2024 as an HR issue rather than labelling it as concerns over audit quality and transparency.

A report by law firm Allens into the way KPMG handled the audit whistleblower's complaint, tabled by the parliamentary inquiry, said "KPMG's 2024 and 2025 Transparency Reports omitted any mention of an active whistleblower complaint, despite indisputable evidence one existed".

KPMG Australia has been forced to cut hundreds of jobs in the wake of the audit leaks scandal, and more cuts could follow.