KPMG seeks financial support from parent group in wake of audit scandal

KPMG Australia has asked its parent company for financial support and laid off hundreds of staff after an audit scandal rocked the Big Four firm’s business down under.

In its annual results on Monday, the Australian arm of the accounting group said it will cut its workforce by five per cent and partner pay by 13 per cent, as it battles a downturn in client spending and the fallout of a scandal involving the misuse of confidential data to win audit contracts.

“KPMG has reviewed its costs and future workforce needs in response to continued economic weakness, difficult market conditions and the impact of the firm’s conduct and whistleblower matters,” the firm said in its results.

KPMG Australia executive, John Sams, said in a statement: “With demand for consulting remaining weaker, most of the roles affected will be in our consulting business. Changes to our business and the professional services landscape have also reduced the need for some roles in business services.”

The job cuts are expected to be the first stage of a deep cost-cutting exercise known as Project Vector, the Australian Financial Review reported. A total of 360 employees and 27 partners have been let go in the initial round, KPMG said.

The firm has been left reeling by revelations its senior staff leaked documents internally to generate new business and then mishandled a whistleblower complaint on the issue. The outcry has caused public sector bodies in Australia to place a freeze on new contracts with the company, while some of its largest corporate clients have ditched the firm.

The firm has a workforce of 9,000 in Australia, about 700 of whom are partners. Around 75 partners have left since the scandal became public in March.

Three consecutive years of financial woes 

The division has reportedly turned to KPMG International to ask for “a range of support” to help it weather the crisis, according to ABC Australia. This includes financial support in order “to remain solvent”, the outlet reported.. 

The scandal has compounded an already challenging period for the firm, which has now experienced three consecutive years of declining revenue. In the 2026 financial year, revenue fell one per cent to AUD $2.25bn (£1.18bn), following a three per cent drop the prior year.

Claudine Cassar, a former Deloitte partner and writer on corporate culture, told Morning Wire the firm’s revenues “are likely to deteriorate further”, particularly in audit work. 

Despite KPMG Australia reporting an 11 per cent uptick in audit revenue for the 2026 financial year, more recent audit client departures have not yet been accounted for and their impact is expected to start showing in 2027. 

One of these is property developer Lendlease, which in June ended a 68-year relationship with the company. Senior KPMG staff used confidential information to win around AUD$10m (£5.2m) in additional fees from the company.

Cassar said KPMG Australia “is now under pressure because of the revenue covenants it committed to [with its banks] when it was booming, which could make it very difficult to obtain more bank finance.” 

What is KPMG International? 

The firm, like the rest of the Big Four, operates as independent members in each representative country, but KPMG International, registered in England, is the parent group that oversees the policies and procedures all member firms must follow. 

KPMG International has a global board of senior partners and chief executives worldwide that oversees and guides the parent company. Among the board members is Gary Wingrove, its current global chief operating officer and the incoming global chairman and chief executive as of October.

Before moving into the role, Wingrove led KPMG Australia from 2013 to 2021. 

Cassar explained: “Allowing a major KPMG member firm in an economy as significant as Australia to become insolvent would cause enormous reputational damage to KPMG globally.

“In my view, they do not really have a choice other than to provide the cash,” she added. 

When approached for comment, KPMG International said they “wouldn’t be able to comment on financial arrangements between KPMG International and firms”.