KPMG Australia chief acknowledges firm’s ‘indefensible’ actions: Trial Balance
The Trial Balance is CFO.com’s weekly preview of stories, stats and events to help you prepare.
Part 1: Amid allegations of client data leaks in Australia, KPMG exec acknowledges “major failings.”
The Big Four continue to face a reckoning down under.
Amid serious discussions to break up the four large accounting firms in Australia, the head of KPMG’s business unit in the country told a parliamentary committee late last week that his company has had “major failings” that are “indefensible,” according to media reports.
“We can’t go with the ‘few bad apples’ line here, we absolutely have to look at our culture,” John Sams, CEO of KPMG Australia, told the committee on Friday, according to Reuters.
Sams, who was appointed chief executive after the company’s former CEO stepped down amid alleged client data leaks, made the comments at a parliamentary hearing on alleged client data leaks. He said he would not try to defend KPMG’s past behavior, Reuters reported.
Among the allegations, KPMG Australia’s former Chief Operating Officer Eileen Hoggett is said to have printed confidential documents for a client, kept them in her locker and then authorized another employee to view them to help bid on another proposal, according to Reuters.
Per The Guardian, the Australian parliamentary committee then read a 2023 email to Hoggett where she suggested showing that employee “the printed version in my locker … without letting too many people know,” accompanied by a smiley-face emoji.
Hoggett was expelled from the firm after her email was discovered in July, The Guardian reported. She admitted to printing the documents off and keeping them in her locker, but said she didn’t recall letting others see them, the newspaper reported.
Deborah O’Neill, who chairs Australia’s Parliamentary Joint Committee on Corporations and Financial Services, said that “many, many more” whistleblowers have stepped forward to talk about alleged wrongdoings at KPMG.
Meanwhile, a former deputy counsel at KPMG testified that staff “misled” him when he attempted to initiate an investigation into client data leaks. The lawyer said his initial investigation in late 2024 was “fundamentally undermined” by other staffers’ “misleading if not directly deceptive” answers, The Guardian reported.
The parliamentary hearing came as legislators weigh a host of regulatory changes for Big Four firms in Australia. The nation’s assistant treasurer earlier this summer said that some large accounting, auditing and consulting firms had engaged in behavior that was “not fair and honest.”
Part 2 — This week
Here’s a list of important U.S. market events slated for the week ahead.
Monday, Aug. 17
Tuesday, Aug. 18
Wednesday, Aug. 19
Thursday, Aug. 20
Friday, Aug. 21
Part 3 — Quote of the week
“I have a sign in my office that says “No bad days,” and I try to remind myself of that. The CFO role is a humbling position. It’s really special to be here, and one needs to have the appropriate amount of gratitude to be their best.”
Peter Stern
CFO, Brooklyn Sports & Entertainment
Peter Stern, who runs finance for the Brooklyn Nets, New York Liberty and Barclays Center, recently sat down with CFO.com to discuss how his investing background at Alibaba shaped his approach to capital allocation, the financial impact of the NBA’s new media rights agreement and why teaching financial literacy to incarcerated individuals has changed his approach to leadership.
