KPMG Australia announced on Wednesday that its chief operating officer, Eileen Hoggett, has stepped aside from the firm’s executive role while a series of investigations are underway. An internal email sent to staff by interim CEO Stan Stavros and provided to Reuters said Hoggett will retain her position as an audit partner during the investigative period.
Hoggett, who took on the COO role in 2023, relinquished the executive responsibilities amid intensifying scrutiny that has already prompted the resignations of KPMG Australia’s CEO and head of audit. Those departures followed criticism of how the firm handled an internal probe into a whistleblower’s allegations that confidential client information was misused to win audit engagements.
KPMG has said the internal investigation did not substantiate the whistleblower’s claims. The same allegations were also brought to the attention of a senator from Australia’s ruling Labor party, the firm said.
In March, Labor Senator Deborah O’Neill told parliament the whistleblower alleged confidential board papers from real estate company Lendlease were repurposed to support bids for major audit tenders at Westpac and Dexus. Senator O’Neill said documents were taken from Lendlease by the lead partners on the account, identified as Eileen Hoggett and Paul Rogers, and that some of the materials were physically secured in a locker belonging to Ms Hoggett.
Requests for comment sent to Hoggett via LinkedIn did not receive an immediate response.
The claims have intensified scrutiny of Australia’s professional services industry. The sector faced public and regulatory attention in 2023 after reports that another major firm had shared confidential government information with prospective clients. That episode prompted parliamentary hearings, a corporate restructure of the consultant’s government arm, multiple employee departures and legislative changes to tighten regulation of the industry.
In his email to staff, Stavros acknowledged that the firm should have handled the whistleblower’s concerns differently. "I am 100% committed and will ensure we approach the issues in the right way," he wrote, adding that heightened public scrutiny can be expected to continue for some time.
Regulatory action has already begun. The Australian Securities and Investments Commission has opened a preliminary investigation into the conduct of three KPMG registered company auditors. In addition, a parliamentary hearing into the whistleblower allegations is scheduled for June 19.
Market data snippets embedded in reporting of the story showed short-term price moves in names referenced in the allegations: Lendlease (LLC) was cited with a decline of 6.32%, Westpac (WBC) with a gain of 0.9% and Dexus (DXS) with a drop of 1.3% in the period reflected. The article provided those figures as part of the market snapshot accompanying the developments.
As the firm navigates internal and external reviews, the situation underlines continuing regulatory and public interest in how professional services firms manage confidential client information and conduct internal investigations. Investigations by regulators and parliamentary oversight will determine the next steps and potential consequences for individuals and the firm.
Timeline and next steps
- Hoggett steps aside from COO role but remains an audit partner while inquiries are pending.
- CEO and head of audit previously resigned amid criticism of the internal investigation into the whistleblower’s claims.
- ASIC has launched a preliminary probe into three registered company auditors at KPMG.
- A parliamentary hearing regarding the allegations is scheduled for June 19.