Australian regulator reviewing 551 audit misconduct complaints at Big Four firms
Australia's corporate regulator is examining 551 complaints of potential audit misconduct at the country's Big Four accounting firms, a parliamentary committee heard on Friday. The Australi...
Australia's corporate regulator, the Australian Securities and Investments Commission (ASIC), is investigating 551 complaints of potential audit misconduct at the country's Big Four accounting firms, a parliamentary committee learned on Friday. ASIC chair Sarah Court testified at a Sydney hearing that the regulator will examine each complaint before initiating an official inquiry.
The Big Four - KPMG, PwC, Deloitte, and EY - have faced multiple scandals in Australia, and ASIC's review of hundreds of complaints could exacerbate concerns about misconduct in the sector. KPMG is currently under scrutiny following a whistleblower's allegation that the firm shared confidential company information with private-sector clients to win auditing work.
ASIC launched an investigation into the sector's complaints handling procedures in July 2023, forcing the firms to surrender internal documents. So far, ASIC has received 551 complaints, according to Chris Savundra, ASIC's executive director of enforcement and compliance. The volume of complaints is substantial, and the review is still in its early stages.
ASIC will issue notices for further information based on the material, potentially increasing the number of complaints. The regulator is also investigating suspected misconduct by KPMG's audit partners, including whether the firm breached whistleblower protections and whether it submitted misleading documents to the regulator. KPMG initially dismissed the allegations as unsubstantiated but later admitted that employees misused internal documents.
The firm's CEO, audit head, and chairman have resigned since the misconduct was exposed in March. Court mentioned resistance and legal privilege claims when ASIC began its early inquiries into KPMG. The scandal follows a 2023 revelation that PwC shared confidential government tax policy details to secure clients, leading to parliamentary inquiries and recommendations to close regulatory loopholes, but most recommendations remain unimplemented.
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