Effective 2025 federal tax rates paid by these corporations: Alphabet: 8.01% AT&T: 4.6% Meta: 3.57% General Motors: 3.09% Amazon: 1.37% Exxon Mobil: 1.31% Disney: -1.57% CVS Health: -3.88% Income tax rate paid by the typical American: 14.5% This is what a rigged system looks like.
Apple Launches Sleek, Beautifully-Designed New Tax Avoidance Program
KPMG audit scandal expands into Westpac C-suite
Edmund Tadros and Hannah Wootton
Former Westpac chief financial officer and KPMG partner Michael Rowland had dinner with a key partner from the big four firm during the tender process for the bank’s $32 million-a-year audit contract, despite its own rules barring such interactions.
Rowland, who was Westpac’s chief financial officer at the time, also allegedly shared key information about KPMG and its rivals’ pitches for the audit tender with that partner, according to allegations by the whistleblower at the heart of the firm’s audit misconduct scandal engulfing the firm.
Former Westpac executive and KPMG partner Michael Rowland (left) and KPMG partner Daniel Knoll. AFR
The partner was Daniel Knoll, who was KPMG’s lead client engagement partner for Westpac at the time of the tender and is now in charge of the firm’s financial services consulting businesses.
Rowland denied discussing the audit tender process with Knoll, but said they had one dinner to discuss KPMG’s other work for Westpac.
Westpac, KPMG and Knoll declined to comment.
KPMG has been under intense scrutiny since March, when Labor senator Deborah O’Neill read out allegations made by a former employee-turned-whistleblower whose concerns had been ignored by the firm.
The whistleblower alleged that KPMG partners misused confidential client information and leveraged conflicted relationships with alumni to secure lucrative contracts. Law firm Allens, which was asked by KPMG to review the allegations, has substantiated most of the claims in an investigation that is continuing.
First time scandal has touched the C-suite
In July, Westpac demanded KPMG remove lead partner Kim Lawry from its file over her role in the scandal.
That same month, Westpac director and former KPMG partner Peter Nash caved to months of pressure to resignfrom the bank’s board over his conduct during its audit tender.
But concerns around KPMG misusing conflicted relationships to win work have so far focused on directors. Revelations of Rowland’s engagement with Knoll are the first time they have extended into corporate Australia’s C-suite, which is also littered with KPMG alumni.
The information allegedly shared by Rowland with Knoll included “feedback on the performance of KPMG’s competitors and suggested areas …. KPMG should focus to differentiate”.
KPMG went on to win the audit in March 2024.
These allegations were provided in anonymised form to the parliamentary inquiry investigating the scandal. The Australian Financial Review has identified those involved through sources with knowledge of the tender process at both KPMG and Westpac, who requested anonymity.
The firm’s initial internal investigation into the allegations, which it has since conceded lacked rigour, substantiated that meetings between Rowland and KPMG took place, but did not substantiate what was discussed.
Knoll told KPMG that he and Rowland met for “one or two meals” and that Rowland paid for one dinner. But Rowland said there was only one dinner and both men paid for their own meals.
Rowland, who is overseas, said he had met with KPMG and other professional services firms before and during the audit tender process, “in connection with the expected management of existing and proposed consulting arrangements”.
He said he was not involved in the selection of Westpac’s auditor because of “comprehensive and appropriate safeguards” to manage any potential conflicts of interests.
“At no time did I disclose information in relation to Westpac’s external audit tender to KPMG or any other firm.”
The Financial Review has been told by a source familiar with the Westpac’s audit tender rules that its internal management processes for the audit tender barred engagement with pitching firms unless it was required in the course of other non-audit work.
Rowland and Knoll were known within KPMG as friends and close colleagues. Rowland was a KPMG partner for 6½ years before joining Westpac and a senior partner in the financial services division. He was also an employee then a partner for a separate stint at the firm in the 1980s and 1990s.
It is not clear why the men would have a business meeting over dinner.
An insider at Westpac said the bank was aware of Rowland’s dinner with Knoll, but was told it was a social event. They said the meeting, as it was characterised to the bank, breached its tender protocols.
The Financial Review previously reported that Nash also broke Westpac’s rules during the audit tender, despite the bank’s assurances that he was “not involved” in that process.
His breaches included sitting in on meetings when KPMG, EY and Deloitte pitched for the work. He also stayed at the house of then-KPMG chairman Martin Sheppard during the tender process.
Find out the inside scoop about Accenture, Deloitte, EY, KPMG, PwC and McKinsey. Sign up to our weekly Professional Life newsletter.
Edmund Tadros leads our coverage of the professional services sector. He is based in our Sydney newsroom.Email Edmund at edmundtadros@afr.com.au
Hannah Wootton is a Rear Window columnist, based in the Melbourne newsroom. Send Hannah tips securely on hannahwootton.04 on encrypted messaging platform Signal. Connect with Hannah on Twitter. Email Hannah at hannah.wootton@afr.com