By Christine Chen
SYDNEY, Oct 22 (Reuters) - A probe into KPMG Australia has found it mishandled whistleblower allegations of client data leaks and let cultural and governance weaknesses persist for years, but stopped short of recommending a permanent ban on the firm from federal government work.
The Department of Finance, which commissioned the review by former bureaucrat Ian Watt, said KPMG has instead agreed to not bid for new federal work until February next year while the firm undertakes further governance reforms, extending a pause in place since June.
"The review considers that KPMG should not be treated as permanently unsuitable for Commonwealth work, but nor should confidence be restored on the strength of assurances and encouraging early signs alone," it said.
The review was launched to probe KPMG’s governance, culture and ethics following a whistleblower’s allegations that staff misused confidential information to bid for new audit contracts.
"KPMG mishandled the whistleblower matter. Its response was misguided, fragmented, prolonged and, at critical points, lacked clear ownership," the report released on Thursday said.
KPMG did not immediately respond to a request for comment.
The report said despite the whistleblower raising concerns of unethical conduct arising from commercial pressure and a fear of retaliation, KPMG primarily treated it as an "employment matter" and was more focused on the legal implications and organisational risks, paying inadequate...
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