KPMG 'not full of bad apples', former CEO says at Australian parliamentary inquiry
Andrew Yates, former CEO of KPMG Australia, told the parliamentary inquiry that the sector is "not full of bad apples" but acknowledged that internal controls need to be strengthened. Peter de Cure, chair of Australia's Tax Practitioners Board (TPB), said warnings of conflicts of interest in audit reports had risen. The Big Four auditors in Australia could face further investigations, he said.
In his evidence to the parliamentary inquiry, Andrew Yates, former CEO of KPMG Australia, said: "The sector is not full of bad apples; the overwhelming majority of the system adheres strictly to professional ethics and audit standards." Yates also acknowledged that the firm's internal conflict-of-interest reviews were inadequate between 2019 and 2023, and said "significant improvements" had been made. The committee chair reminded those present that KPMG's federal government contracts were being reviewed.
Peter de Cure, chair of Australia's Tax Practitioners Board (TPB), said warnings of conflicts of interest in audit reports had risen 28% over the past three years, and said the "Big Four" could face further investigations. The Australian Senate's finance committee said it would publish a report within three months considering proposals for sector-wide structural reform.
On the stock market, the shares of large listed companies with broad KPMG client links closed 0.6% lower on average. Australian Financial Review chief economist John Kehoe commented: "Sectoral splits and consulting-audit separation reforms have entered the market agenda; long-term pressure on fee structures and the business model is to be expected."
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