SYDNEY, June 23 - KPMG Australia said on Tuesday that its chairman, Martin Sheppard, and two senior audit partners, Paul Rogers and Eileen Hoggett, have resigned amid a controversy over how the firm handled whistleblower allegations that it misapplied confidential client material to win audit engagements.
The departures follow earlier exits at the firm, with both the chief executive and the head of audit having quit as the matter widened. In a statement, interim CEO Stan Stavros described the moves as urgent and necessary, saying: "The decisions announced today are necessary and immediate. 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."
The situation centres on allegations from a whistleblower that KPMG used confidential board papers from real estate company Lendlease to bolster bids for major audit tenders. According to the publicly released allegations, Paul Rogers and Eileen Hoggett were identified by the whistleblower as the lead partners on the Lendlease audit team implicated in the conduct.
Both Rogers and Hoggett are the subject of an investigation by Australia's corporate regulator. KPMG has said it will strengthen governance at its Australian business by appointing an independent chair and by adding independent members to the Australian board in response to the controversy.
Summary
KPMG Australia's leadership has been reshaped after a whistleblower accused the firm of using confidential client documents to pursue audit work. The chairman and two audit partners have resigned, the two partners named face an official regulatory probe, and the firm intends to bring independent oversight onto its Australian board.
Context and immediate developments
The firm announced the resignations amid heightened scrutiny following the whistleblower's allegations concerning Lendlease board papers. The departures include the chairman and two senior audit partners specifically named in the allegations. The corporate regulator has opened investigations into the two named partners, and KPMG has signalled governance changes including the appointment of an independent chair and the addition of independent board members to its Australian board.
What KPMG says
Interim CEO Stan Stavros said the actions taken were "necessary and immediate" and acknowledged that the firm fell short of expected standards, noting the impact on the whistleblower, staff, clients and the broader community.
This article presents the facts contained in the firm's announcement and the whistleblower allegations as they have been made public. It does not add or infer further details beyond those provided.