Senator says KPMG misconduct reflects 'systemic failure' in regulation of profession

Senator Paul Scarr said the egregious breaches undertaken by senior leaders at KPMG were a clear indication that the accounting body had also failed in its role in upholding the ethical standards of the profession as an accounting body.

"I'm sitting here and I'm looking at a situation [similar] to what we saw at the highest levels at PwC. We're not talking about junior practitioners, we're talking about lead audit partners, people with great responsibilities as stewards of the profession," Scarr said.

"We had those awful revelations in relation to PwC and how I'm sitting here looking at KPMG and the chief executive is gone, the head of audit gone, the chief operating officer demoted and sectioned in their capacity as a Westpac auditor, and the lead audit partner of Westpac sanctioned. Again, leaders of the profession and I are left here to reflect that CA ANZ has failed.

"If you have senior members of the profession who are your members, senior members bringing on the next generation and these egregious breaches are occurring and are only disclosed because Senator O'Neill and the Committee, years after the event, took evidence from a whistleblower and used Parliamentary privilege to put them in the public light. I'm putting it to you, Ms van Onselen, that CA ANZ has failed."

CA ANZ chief executive Ainslie Van Onselen said that CA ANZ had done everything it could within its by-law powers.

"In 2022, we went to our members and we reviewed those bylaws and had them strengthened, we increased fines by five-fold and introduced mandatory ethics training," van Onselen told the committee.

Senator Scarr said the 2022 bylaw changes had failed to drive effective change in the system, given the matters now unfolding in 2026.

"These are [CA ANZ's] members, you are a membership organisation. There should be a revolution in the streets. Every accountant is doing the right thing, who's a member of CA ANZ, and I feel for them," he said.

"This is systemic failure in terms of regulating this important profession."

The accounting body rejected the assertion that there had been a systemic failure in terms of regulation of the profession.

"You say that you don't think there has been a systematic failure because you're conducting an investigation. It's not about the investigation, it's about the fact that there are past investigations, CEOs, managing partners, all getting paid out, they leave, whatever the caravan moves on, the same thing happens. From my perspective, that's systemic failure," Senator Scarr said, addressing the leadership of CA ANZ.

In a statement provided to the inquiry, CA ANZ confirmed on Friday that its independent Professional Conduct Committee was progressing 12 active investigations, including three initiated from self-disclosures.

This is in addition to the existing academic integrity investigations the accounting body is underway with.

Van Onselen said the allegations before the committee were serious and "struck at the very heart of trust in audit".

"[They] must be scrutinised by every responsible regulator and CA ANZ is actively investigating," she said.

Van Onselen said that CA ANZ would use every tool at its disposal to hold members accountable but stressed that the regulatory framework around audit must keep pace.

"CA ANZ is doing its part; the rest of the system must do the same," she said.

CA ANZ has also called on the government to strengthen the regulatory framework around audit, telling the Committee that CA ANZ cannot act on this matter alone.

"ASIC's jurisdiction to regulate audit firms needs clarity and adequate resourcing. PCAOB-style regulation, with firm inspections and fines in the millions, requires a regulator with the power and funding to match," it said.

The accounting body also wants to see amendments that give junior auditors more support if they receive a protected disclosure about an audit client.

"CA ANZ has publicly supported the Committee's own recommendations 36 and 37 (from its 2024 report), which have not yet been implemented. CA ANZ welcomes the Assistant Treasurer's announced review of whistleblower protections and will contribute to it constructively," it said.