The Australian Securities and Investments Commission (ASIC) has launched a review into how the ‘Big Four’ audit companies handle complaints about audit conduct, intensifying regulatory scrutiny of the sector.
The move follows allegations that KPMG staff misused confidential information to secure contracts and comes as the federal government weighs tougher controls on large accounting, audit and consulting partnerships.
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The ASIC’s review will focus on internal and whistleblower complaints related to audit practices including the handling, use and sharing of confidential information.
This work will proceed alongside a separate, ongoing investigation into specific allegations involving KPMG.
ASIC chair Sarah Court said: “The allegations concerning KPMG are serious.
“ASIC will use the existing suite of limited powers available to us, while continuing to engage constructively with the government’s reform process.”
The review is being launched as Australia’s Treasury consults on reforms that could strengthen oversight of major professional services companies and potentially extend ASIC’s role.
The government has also indicated it is considering structural options, including “breaking up the Big Four”, following a series of high-profile controversies.
KPMG Australia has been accused by a whistleblower of using confidential client information to win lucrative work.
PwC Australia was involved in a scandal around three years ago involving the sharing of confidential government tax data with prospective clients.
The ASIC said it would continue its “significant investigation into specific allegations of misuse of client confidential information at KPMG”.
The regulator also highlighted constraints in its current legal powers over partnership-structured audit practices, noting that these differ from its wider authority over corporations, including listed entities.
