KPMG Australia is undertaking a significant leadership restructuring following a scandal involving the misuse of confidential client information to secure audit contracts. The firm announced that Martin Shepard, its current chair, will step down “shortly” and be succeeded by an independent chair. Alongside Shepard, senior partners Paul Rogers and Eileen Hoggett, who have been implicated in the allegations, will also depart.

The reshuffle comes weeks after Andrew Yates, the chief executive, and Julian McPherson, the audit leader, stepped aside amid criticism that the firm’s initial investigation into a whistleblower’s claims was inadequate. The allegations center on the purported use of sensitive client data from some of Australia’s largest companies to win new audit engagements.

This wave of departures follows a parliamentary committee hearing held less than a week ago, during which Shepard, Rogers, Hoggett, and other senior figures faced scrutiny over their handling of the whistleblower’s accusations. Senators expressed a lack of confidence in Shepard, criticizing KPMG for withholding details of internal and external investigations related to the claims. Shepard subsequently agreed to provide telex documents to the committee.

KPMG Australia’s leadership upheaval mirrors earlier controversies faced by another Big Four firm in the country. PricewaterhouseCoopers (PwC) experienced a “tax leaks” scandal that led to the exit of senior executives and prompted an extensive operational overhaul, including the introduction of an independent chair and new board members.

In a statement to its partners, KPMG Australia confirmed the launch of an “action plan” and revealed that Principia Advisory, an independent firm, would conduct a new investigation into the whistleblower’s allegations, with findings set to be published publicly.

Stanvros, the interim CEO, acknowledged the firm’s failings, saying, “We did not meet the standards expected of us, and we recognise the impact this has had on the whistleblower, our people, our clients and the community.” He noted the parliamentary inquiry highlighted issues of unethical conduct by senior staff and the personal consequences for the whistleblower, emphasizing that KPMG Australia is committed to understanding these shortcomings and ensuring they are not repeated.