ATO Assistant Commissioner Michelle Sams says there are legitimate reasons why some entities don’t pay tax. Photo: ATO
One day into the job and KPMG’s CEO is already facing questions over whistleblower saga
KPMG Australia’s new boss, John Sams, is already facing questions over his judgement in relation to the firm’s handling of whistleblower complaints that led to his predecessor’s resignation and Sams’ appointment to the top job on Tuesday.
The parliamentary committee investigating the scandal released documents on Tuesday evening that KPMG had previously relied on to claim there was no substance to the allegations before it backtracked in the face of a wave of political and media pressure.
In an April 30 document summarising the findings of KPMG’s investigations, submitted by the firm’s leadership, the consultancy claimed that there was largely no substance to a whistleblower’s allegation that confidential audit information had been misused.
KPMG said Sams did not see this report until May.
Labor senator Deborah O’Neill, who is leading the parliamentary committee, said in a statement following the release of the documents on Tuesday that the summary was “full of calculated half-truths and strategic denial.”
“Let’s be clear that in April, this document of 22 pages was the firm’s concerted effort to convince the parliament of Australia that there were no failures at KPMG and that the whistleblower’s concerns were completely unsubstantiated,” she said. Since then, O’Neill argued, many of the whistleblower’s claims had been substantiated.
“I question the judgement of those who allowed KPMG to send this summary to the committee, regulators and government bodies,” O’Neill said.
The committee also released a document with the whistleblower’s original email complaint from May 2024, which included claims of the “recording of client conversations without permission and subsequent sharing of these with other KPMG employees.”
Sams was elevated from his role of chief financial officer to CEO on Tuesday after rising through KPMG’s ranks in Australia and overseas since 2003.
There is no suggestion Sams was personally involved in any misconduct, but as chief financial officer of KPMG since October last year, he was on the firm’s leadership team. During that period, numerous senior executives at the firm resigned amid its stumbling response to revelations that some of KPMG’s most senior staff allegedly accessed confidential client information to win new customers.
KPMG chairman Michael Ebeid said Sams would lead the firm’s efforts to fix its integrity issues.
“John has a clear mandate from the board: to strengthen leadership and culture, improve confidence with our people, clients, regulators, government and the parliament, and focus KPMG on the areas where it can make the greatest contribution to our clients, people and stakeholders,” Ebeid said.
Sams reiterated the firm’s mistakes in a statement. “The firm fell short of the standards rightly expected of us, and the accountability for these failures will continue to be implemented,” he said. “We have serious work to do on our culture, our leadership and our governance and it will take resolve and endurance.”
Among the first tasks on his list are likely to be job cuts. The firm has not denied reports of redundancies, but the process will not begin in earnest until after Sams is established in his new role.
Earlier this month, a KPMG spokesman said it continues to evaluate a range of options to ensure the firm remains well positioned for the challenges ahead.
“We are reviewing our operating model, cost base and workforce needs,” the spokesman said. “No decisions have been made regarding any specific measures or any potential impact on roles. We recognise that discussions of this nature can create uncertainty, and as decisions are made, we will communicate with our people first and in a respectful way.”
All four of the major consulting giants have been cutting staff in response to a weaker economic environment and falling revenue from federal government business, which has been the single biggest customer for these firms and especially KPMG.
Sams joined the UK arm of KPMG in 2003 as a graduate and moved to Australia in 2006. He recently led its commercial advisory and transactions business as lead partner.
KPMG said the appointment was overseen by a panel comprising independent directors Ebeid, former big business lobby boss Jennifer Westacott and prolific corporate adviser Kerry Schott. External candidates were also considered for the role.
KPMG is under intense scrutiny after admitting that some of its staff accessed confidential information from corporate clients to win business – a serious breach of trust in the world of auditing that is essential to the integrity of financial markets.
KPMG’s investigations have confirmed some of the whistleblower’s allegations, which included the sharing of sensitive Lendlease and Optus data among staff bidding for audit work with Westpac, Dexus and Telstra.
KPMG’s former CEO Andrew Yates and chairman Martin Sheppard resigned in the wake of the scandal, along with many senior audit partners. One of its most significant audit clients, Lendlease, is preparing to dump KPMG as its long-time auditor and its business with federal and state governments is under review.
The allegations were first raised to the firm in 2024 but did not become public until O’Neill aired them in March this year.
“I note reports of concerns within KPMG about the role Mr Ebeid has played in advancing the path of Mr Sams to CEO,” O’Neill said. “Given there has been no formal agreement by partners to allow Mr Ebeid, who is not a partner of KPMG, to assume the role of chair of the board.”
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
MORE:
Colin Kruger is a senior business reporter for the Sydney Morning Herald and The Age.Connect via 
