Andrew Yates resigns as KPMG Australia chief amid widening scandal

KPMG’s Australian chief executive Andrew Yates has sensationally resigned after pressure continues to mount on the firm over its handling of claims staff inappropriately shared client data.

A three-and-a-half-decade veteran of the Big Four firm, Yates was appointed as its chief in 2021, before then having his tenure extended for a further three years in 2024 after having navigated multiple Senate grillings following the PwC government tax scandal.

Now, Yates has come undone over KPMG’s own confidentiality breaches, and handling thereof, with an internal investigation over whistle-blower claims having reportedly uncovered another instance of private client data being misused in a bid to win audit contracts.

Stan Stavros, KPMG’s national managing partner for deal advisory & infrastructure, has been appointed interim CEO while law firm Allens continues its current investigations, with the firm’s audit & assurance boss Julian McPherson also out the door. Like Yates, McPherson had spent more than thirty years at the firm in Australia and abroad, including as head of audit since 2023.

Another scandal

The latest Big Four furore kicked off in March with claims aired from a former KPMG audit executive that the firm had used confidential client data from Lendlease to win lucrative audit contracts with Westpac and Dexus, with KPMG, in the face of renewed Senate heat and further allegations, later admitting senior partner Paul Rogers had been provided with unauthorised access.

“Throughout the Westpac tender, KPMG received feedback and position intelligence not available to competitors,” Labor senator and chief Big Four tormentor Deborah O’Neill contended at the time. “This included commentary undermining EY’s proposed lead partner, guidance to reduce KPMG’s fee by approximately 25 percent, and advice on managing perception optics.”

The current fall-out however is as much about how the firm handled the complaints internally as it is the actual client breach, with both Yates and KPMG chair Martin Sheppard stating investigations made both internally and externally in 2024 failed to substantiate the claims, while a second law firm’s investigations into KPMG’s investigations also supposedly gave the all-clear.

That tune has since changed, with the firm admitting its treatment of the whistleblower and previous probes had fallen “short of expectations” and the “rigour required” and Sheppard now saying; “We apologise unreservedly to the whistleblower. We commit to learning from this to ensure we create an environment where it’s safe and easy to surface concerns that will be acted upon.”

That late acknowledgement however follows earlier reports that, rather than properly address the issues, the unnamed whistleblower was instead subjected to a severe retaliatory backlash for raising his concerns in the first place and continued attempts to push him out of the company entirely, with KPMG management reportedly framing the complaints as merely a “workplace grievance”.

Ramifications

“I have been committed to a speak-up culture in our firm, and it is clear that in this case we have let ourselves down and I take accountability,” Yates said from under the bus as he stepped down from his CEO role after five years (although it wasn’t made clear if he would also depart the firm), with McPherson adding; “Matters have arisen for which I am responsible, and I take accountability.”

KPMG said an interim replacement for McPherson would be made shortly, while Stavros will take on CEO duties while it searches for a permanent successor to Yates – a scenario which didn’t end on a happy note for Kristin Stubbins at PwC. Based out of Melbourne, Stavros has been a partner at the firm for over two decades, and led the establishment of its integrated infrastructure practice.

Meanwhile, the firm also has other front-line matters to deal with, with Sheppard also stating: “KPMG apologises to the clients whose information was not handled with the care and respect they expect from us. We acknowledge we have work to do to rebuild trust. That’s why we are not asking anyone to take our word for it, and we are inviting scrutiny and challenge on our remedial actions.”

One of those remedial actions is in engaging global “ethical culture specialists” Principia Advisory to conduct an external review of the firm’s “underlying speak up culture” and internal reporting policies and processes, with Sheppard adding that KPMG is “committed to transparency” and will publicly publish their findings and “move swiftly to act upon their recommendations.”