16 November 2026 • 3 minute read
KPMG Australia reported that a disciplinary panel reviewed and substantiated 36 matters of serious misconduct, including four sexual harassment matters.
The accounting giant released the figures in its Impact Plan and Data Book, which reports on the firm’s activities, voluntary disclosures, and actions of KPMG Australia, KPMG Fiji, and KPMG Papua New Guinea across governance, prosperity, people, and planet.
The data book, which covered the relevant activities for the financial year to 30 June 2026, revealed that the Employee Relations Conduct Panel reviewed serious matters involving employees, contractors, and partners, and in FY26, 36 matters were substantiated.
This included 32 breaches of the code and four sexual harassment matters. The number of sexual harassment reviews reduced from 12 in FY25.
The data also revealed that these reviews resulted in 11 exits from the firm (including termination and resignation) and 25 written warnings (including financial penalties and remediation actions taken).
In addition, the data book figures revealed that there were 34 cases of Code of Conduct breaches relating to the use of AI and “academic integrity” that KPMG said resulted in disciplinary outcomes.
It said that its mandatory assessments are open book knowledge checks following internal mandatory courses and people are allowed to download training materials to assist with a mandatory assessment.
“But they are prohibited from uploading those materials into AI tools to assist them whilst completing a mandatory assessment or to use AI tools to request answers to mandatory assessment questions,” the report said.
All 34 substantiated matters related to prohibited AI use during these assessments received a disciplinary outcome.
In a message to clients and the community, KPMG Australia CEO and independent chairman Michael Ebeid said the serious allegations of auditor misconduct and mishandling of confidential client information made by a whistleblower and then aired by senator Deborah O’Neill in parliament and failures of governance, leadership, and judgement “damaged the trust of our stakeholders”.
“We acknowledge that some partners and people failed to uphold our values and that we took too long to respond appropriately,” they said.
“We got important things wrong and let down the whistleblower and others – and we do apologise.”
The reports also revealed thatformer CEO Andrew Yatesand chairman Martin Sheppardreceived millionson their departure from the firm despite their resignations being triggered by the whistleblower scandal and their allegations of misconduct.
Yates took home $6.8 million while Sheppard received $1.8 million in earnings and retirement payouts, although they were docked $700,000 and $526,000 respectively.
A series of recent reviews and reports have revealed damning findings about KPMG Australia’s conduct in the recent past.
Consulting firm Principia Advisory recently found that there werewidespread fears of retaliationamong the accounting firm’s employees if they raised concerns or challenged leadership.
It also received feedback that team members were under-reporting actual time worked, and a lack of clarity on what was acceptable behaviour around the sharing of confidential information.
Anindependent reviewby the Department of Finance revealed that KPMG’s response to the whistleblower matter was identified as misguided, fragmented, prolonged, and often lacking clear ownership.
The independent review by Dr Ian Watt recommended that the ban on KPMG Australia from bidding on Commonwealth contracts be extended to February 2027 until KPMG demonstrates effective implementation and constructive engagement with ASIC, and the TPB, with progress reviewed quarterly.
KPMG said it is engaging constructively with ASIC and the TPB and will continue to do so, and is committed to quarterly reporting to and progress monitoring by the Department of Finance.
The report also recommended that Finance consider reinstating bidding restrictions even after the ban is lifted if KPMG’s reforms halts, significant new information emerges about the whistleblower, or KPMG breaches the Supplier Code of Conduct on unrelated matters. KPMG said it supports this recommendation.
In addition, it was recommended that Finance monitors implementation for up to three years. This includes the development of an implementation plan and benchmarks for Finance by KPMG, monitoring to begin once these are agreed to, and KPMG report quarterly and provide Finance access to necessary information and personnel.
Want to see more stories from trusted news sources?
Make Accounting Times a preferred news news source
Malavika Santhebennur is a journalist on the accounting titles at Momentum Media, Accountants Daily and Accounting Times. She writes news about the accounting industry, regulatory changes, compliance, and the wider accounting landscape. Prior to this, Malavika wrote across several brands in Momentum Media and covered a range of industries, including mortgages, broking, law, real estate, wealth, space, aviation, and defence.
Before joining Momentum Media in 2019, Malavika wrote for Money Management and Super Review, with a focus on financial services, wealth, and superannuation.
