Australia’s corporate regulator has launched a review of audit conduct complaints involving the country’s Big Four accounting firms as it continues an ongoing investigation into allegations of auditor misconduct at KPMG.
The Australian Securities and Investments Commission (ASIC) said on Thursday it will examine internal complaints, including whistleblower reports, received by KPMG, Deloitte, EY and PwC in connection with the external audit services they provide.
The review follows ASIC’s formal investigation, announced in June, into three KPMG Australia partners over whistleblower allegations that the firm misused confidential client information to secure major audit contracts.
ASIC said it will continue its investigation into what it described as specific allegations involving the misuse of confidential client information at KPMG.
“ASIC will use the existing suite of limited powers available to us, while continuing to engage constructively with the Government’s reform process,” ASIC Chair Sarah Court said in a statement.
The regulator said the latest review will also examine whether the accounting firms received complaints alleging auditor misconduct, including the misuse or sharing of confidential information.
KPMG, Deloitte, EY and PwC did not immediately respond to Reuters’ requests for comment.
ASIC said its authority over partnership-based accounting firms remains limited under current legislation. Unlike listed companies and other corporations, audit partnerships are not subject to the regulator’s full oversight powers.
Court said ASIC generally has authority to investigate only individual registered company auditors within partnerships and only in relation to their conduct during audits.
The regulator has repeatedly called for broader powers to oversee audit firms and stronger enforcement tools to address misconduct.
The Australian government is considering reforms that could bring the Big Four accounting firms under ASIC’s direct oversight and has also raised the possibility of breaking up the firms following a series of high-profile scandals across the accounting sector.
The latest regulatory action follows allegations raised in Parliament earlier this year. In March, Labor Senator Deborah O’Neill told lawmakers that a whistleblower claimed KPMG had used confidential board papers from property group Lendlease to support bids for major audit contracts with Westpac and Dexus.
KPMG previously conducted an internal investigation into those allegations and said it did not substantiate claims of misconduct.
In late May, KPMG Australia announced the resignation of its chief executive and head of audit, Andrew Yates, citing shortcomings in the firm’s handling of the whistleblower’s complaints regarding the sharing of confidential client information.
ASIC’s expanded review comes as the regulator continues examining the allegations against KPMG while pressing for legislative reforms that would strengthen its oversight of Australia’s largest accounting firms.
