KPMG reviewed its secrecy provisions after PwC tax leak
KPMG paid for an independent review of confidentiality processes and reminded staff not to leak sensitive information after it was revealed that PwC former partner Peter Collins shared secret government policy material about a crackdown on tax avoidance by multinationals.
The PwC tax leak effectively triggered an inquiry into conflicts of interest at Australia’s largest consulting firms by a Senate committee.
KPMG and Deloitte have told a senate inquiry into consulting firms they take their ethical responsibilities seriously.
In a submission to the inquiry, KPMG partners Tanya Gilerman and Paul Law said firms and consultants had a duty to operate with the “highest level of integrity, confidentiality and trust”.
The pair also wrote that the firm remained “vigilant in regularly reviewing [its] operations” to ensure partners and staff adhered to the highest ethical standards.
“This is why following the public disclosure of the Tax Practitioner’s Board (TPB) integrity matter, KPMG took steps to reinforce our robust frameworks,” they wrote.
“We commissioned an independent review of our confidentiality processes, which found our policies and procedures were consistent with best practice. We support Treasury’s review of confidential consultations and the Commonwealth Government’s plan to strengthen the TPB.”
The KPMG submission is one of a handful that have been made public ahead of the first day of public hearings for the inquiry which is scheduled for Tuesday.
Obligations, conflict, cheating
After news of the leak, KPMG also reminded staff “of their obligations to comply with KPMG’s policies and procedures on confidentiality”, the submission said.
“We reinforced confidentiality obligations when accepting government advisory roles outside of KPMG, conducted additional risk workshops and committed to undertake a refresh of our confidentiality policies,” it said.
KPMG has been embroiled in a major conflict of interest issue relating to its work for the NSW government and separate integrity issues relating to the behaviour of its partners and staff.
A parliamentary report last year criticised KPMG for accepting work relating to a controversial transport entity from both NSW Treasury and Transport for NSW, saying the decision was “rife with conflict both internally in KPMG and externally” with the two agencies.
In 2021, the US audit watchdog fined KPMG Australia $US450,000 ($680,300) over “widespread” cheating on tests designed to ensure partners and staff act with integrity and have the relevant skills for their work.
Auditing industry watchdog Chartered Accountants ANZ ended up appointing a former federal court justice to oversee a review into its disciplinary processes after being slammed for its “soft” response to more than 1100 KPMG staff allegedly cheating on internal exams.
A submission to the inquiry by rival big four consulting firm Deloitte focuses on the detailed processes the firm has in place around managing conflict and confidential client information.
It highlights that firms have an obligation to adhere to the code of ethics for professional accountants, known as APES110.
The ethical standards contained in APES 110 reflect the profession’s recognition of its public interest responsibility and the standard of behaviour expected of us as a profession,” the submission, signed by chief executive Adam Powick, stated.
Integrity, confidentiality
APES110 covers five fundamental principles of ethics for the professional: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.
The firm considered client confidentiality a “fundamental ethical principal” and had “developed specific conflicts of interest policies and procedures to identify and resolve potential conflicts”.
“[The code] prohibits the disclosure of confidential information without a legal or professional right or duty to disclose and prohibits the use of confidential information acquired as a result of professional or business relationships for our advantage or for the benefit of third parties,” he wrote.
“This includes understanding and following the terms of any confidentiality agreements signed with our clients or professional panels.”.