KPMG audit scandal expands into Westpac C-suite

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.

Robert Breich

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.

More on the KPMG audit leaks

• Rear Window | Kiwi law firm surfs the KPMG relationship wave
• Street Talk | KPMG strategy chief Dennis Krallis joins exodus
• Newsletter | Professional Life: A tough year for consulting’s great and powerful
• Street Talk | KPMG heavy hitters jump ship to Alvarez & Marsal after profit payday
• Rear Window | Macquarie and KPMG’s curious ‘mindset of independence’

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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

How Cops Are Treating Mass Surveillance As a Joke

 “I say the message is two very simple things. First of all, don’t give power to the crazy people who started these problems in the first place,” Vance said in an interview with Newsmax’s Greg Kelly.

JD Vance's Message To ‘Frustrated’ Voters Is An Attack Ad Of His Own Making, Critics Say Polling suggests Americans aren’t convinced by the administration’s finger-pointing.

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Sweden: Social Democracy Won the Century and Lost the Future Jacobin 

US Gov Graph

We cannot govern systems we don’t understand, so we built a complete data model of the United States federal government – entities, positions, people, and the legal relationships between them. Built by CivLabfor you. 

“Introducing the US Gov Graph – a complete map of the people and positions of power in the federal government. 

To fix our institutions we must understand how they work, so we are using AI to model and monitor every government in America. This is Palantir for The People. We exist to set the conditions for an era of civic excellence unmatched since the Founding. We will need nothing less to navigate the age of AI. Self-governing civilization is counting on you.”

New Resource for Supreme Court Watchers

Supreme Court Report – Quantifying the U.S. Supreme Court’s behavior and making it legible for the public. 

Revealed: The Humans Reading Your ChatGPT Chats

404 Media: “We have a big one today: OpenAI is hiring an army of human contractors to read real ChatGPT users prompts. I know this because Ive seen a bunch of internal documents, the system these people are using to read those prompts, and a bunch of the prompts myself. I seriously doubt many of ChatGPT’s more than 900 million users have any inkling that when they type a message into ChatGPT, a person somewhere may be reading that chat. This is especially concerning as more and more people turn to ChatGPT as a therapist or for other sensitive topics. 

Read below for the details. OpenAI is hiring hundreds of contractors who read a massive stream of real users’ ChatGPT prompts, with the prompts sometimes including sensitive personal information, 404 Media has learned. The prompts these people review can include whole conversations between users and the chatbot, conversations that most of ChatGPT’s more than 900 million users probably don’t realize may be read by actual people. 

The goal of these prompt review teams is to improve the responses ChatGPT gives to its users, with the contractors rating and critiquing the chatbot’s generated replies. Internal documents seen by 404 Media show contractors training ChatGPT to not anthropomorphize itself, and to be less sycophantic, a key problem for OpenAI whose over-sycophantic 4o model led in part to multiple peoples’ suicides, according to various lawsuits…”

The High Crime of “LMAO”: How Cops Are Treating Mass Surveillance As a Joke

EFF: “When law enforcement and tech salespeople pitch ALPRs to city councils, they stick to a familiar script. 

They trumpet the technology, which is often provided by private companies like Flock Safety, Motorola Solutions, or Axon, as an essential tool for solving high-stakes crimes, such as car jacking, kidnapping, or murder. But when you strip away the carefully curated talking points, the data continues to reveal a different (and frankly, ridiculous) story. An EFF analysis of ALPR search logs from Flock Safety systems shows that officers across the country are spying on drivers for completely nonsensical “reasons.” Police are routinely searching the Flock database without providing any legitimate justification, making a mockery of our civil liberties by logging reasons like “LOL” (short for “laugh out loud”), “LMAO” (short for “laughing my ass off”), “sexy,” and “idk” (short for “I don’t know”) to access sensitive ALPR location data. 

And in some cases, officers are just mashing keyboard buttons rather than articulating the nature of their searches. Flock Safety claims it has improved its system by requiring officers to select from a dropdownlist of crimes before running a search–but that only makes it easier for officers to hide improper searches behind the veneer of uniformity. The system does not require proof that the dropdown reason actually matches the true purpose of the search.  

With no warrant requirements, limited guardrails, and deficient audit processes, ALPR databases have fostered a culture of unrestricted access to everyone’s location information. This culture of abuse has allowed police to treat a mass surveillance network like their own personal search engine, permitting the tracking of the movements of everyday citizens for low-level complaints, personal whims, and sometimes, seemingly, for the lols.

A Documented Culture of Abuse ALPR misuse isn’t a new phenomenon; it has dominated headlines for more than a year. We already know that officers regularly abuse these systems to stalk past and potential romantic partners. 

We’ve seen ALPRs used to surveil protests, which can chill First Amendment-protected dissent, and seen officers try to use an ALPR system to track down a woman seeking an abortion. Typically, we learn about these uses from documents called “network audits,” which are long spreadsheets that document all the searches that run through an agency’s system. It is not unusual for even a small agency to have a record of millions of searches from thousands of external agencies across the United States. We’ve also uncovered horrific systemic profiling, with more than 80 law enforcement agencies using terms like “roma” and “g*psy” to target ethnic Romani people—often without any mention of a suspected crime. 

And when police aren’t using ALPRs for stalking or profiling, they routinely use them for extreme low-level investigations: verifying whether a student lives in a specific school zone, running employment background checks, following up on loud music complaints, or targeting a motorcyclist simply for holding a cell phone. But somehow, it gets worse…”

Coffee - The Powerful Connection Between Smell & Memory

 IS THERE ANYTHING IT CAN’T DO?  Your Coffee Habit Could Actually Help Slow Aging

London drug dealers are hijacking Google MapsLondon Centric

The Powerful Connection Between Smell & Memory

One thing I didn’t get a chance to work into my post about the unexpected memory bomb triggered by my spice drawer was the tight, deep connection between smell and memory. I first learned about this relationship in college when I read A Natural History of the Senses by Diane Ackerman for a class. It’s still one of my favorite books. Here’s some of what she has to say about smell:

Smell is the most direct of all our senses. When I hold a violet to my nose and inhale, odor molecules float back into the nasal cavity behind the bridge of the nose, where they are absorbed by the mucosa containing receptor cells bearing microscopic hairs called cilia. Five million of these cells fire impulses to the brain’s olfactory bulb or smell center. Such cells are unique to the nose. If you destroy a neuron in the brain, it’s finished forever; it won’t regrow. If you damage neurons in your eyes or ears, both organs will be irreparably damaged. But the neurons in the nose are replaced about every thirty days and, unlike any other neurons in the body, they stick right out and wave in the air current like anemones on a coral reef.

And:

Unlike the other senses, smell needs no interpreter. The effect is immediate and undiluted by language, thought, or translation. A smell can be overwhelmingly nostalgic because it triggers powerful images and emotions before we have time to edit them. What you see and hear may quickly fade into the compost heap of short-term memory, but, as Edwin T. Morris points out in Fragrance, “there is almost no short-term memory with odors.” It’s all long term. Furthermore, smells stimulate learning and retention. “When children were given olfactory information along with a word list,” Morris noted, “the list was recalled much more easily and better retained in memory than when given without the olfactory cues.” When we give perfume to someone, we give them liquid memory. Kipling was right: “Smells are surer than sights and sounds to make your heart-strings crack.”

And:

Smell was the first of our senses, and it was so successful that in time the small lump of olfactory tissue atop the nerve cord grew into a brain. Our cerebral hemispheres were originally buds from the olfactory stalks. We think because we smelled.

Our sense of smell, like so many of our other body functions, is a throwback to that time, early in evolution, when we thrived in the oceans. An odor must first dissolve into a watery solution our mucous membranes can absorb before we can smell it. Scuba-diving in the Bahamas some years ago, I became aware of two things for the first time: that we carry the ocean within us; that our veins mirror the tides. As a human woman, with ovaries where eggs lie like roe, entering the smooth, undulating womb of the ocean from which our ancestors evolved millennia ago, I was so moved my eyes teared underwater, and I mixed my saltiness with the ocean’s. Distracted by such thoughts, I looked around to find my position vis-a-vis the boat, and couldn’t. But it didn’t matter: Home was everywhere.

I could basically quote the whole smell chapter…it’s interesting throughout. Great book — if you’ve never read it, I’d recommend checking it out.

There is always something to remind me

PETER BYRNE, SINGER AND CO-FOUNDER OF NAKED EYES, DEAD AT 74

PETER BYRNE, SINGER AND CO-FOUNDER OF NAKED EYES, DEAD AT 74 Group scored hits in the Eighties with “Always Something There to Remind Me” and “Promises, Promises”

 

Peter Byrne, the singer for the 1980s synth-pop duo Naked Eyes

Peter Byrne, the singer for the 1980s synth-pop duo Naked Eyes, has died at age 74. The band found success in the 1980s with the songs “Always Something There to Remind Me” and “Promises, Promises.”

Hackers Stole Flock’s Camera Software, Revealing How the Company Tracks Cars and People

 It's insane how we're letting decrepit old white men and women, who won't even be around in 10 years, to destroy this planet for profits they can't take with them. 

Amen

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FBI Hack Exposed FBI’s Own Hacking Unit 

Joseph Cox  

The FBI's Remote Operations Unit (ROU) is a highly secretive team of hackers making exploits and tools to break into target’s devices. Some of its members just got exposed.

FBI Builds Out National NSPM-I’m Lo  7 Center to Track Dissent, Docs Show

TPM – Talking Points Memo: “IRS sent 10 agents and three analysts to national effort to police “anti-capitalism” and “extremism on migration, race, and gender” The FBI has tapped employees from across federal law enforcement to crack down on dissent, including agents and analysts with the Internal Revenue Service, documents shared with TPM show. 

They’re working at the FBI’s NSPM-7 Joint Mission Center, per records obtained through FOIA by watchdog group American Oversight. In National Security Presidential Memorandum 7, the White House laid out a national strategy for federal law enforcement, directing it to treat beliefs like “anti-Americanism, anti-Capitalism, and anti-Christianity” and “extremism on migration, race, and gender” as indicators of domestic terrorism. The records obtained by American Oversight include organizational charts for the NSPM-7 Joint Mission Center and a list of thirteen IRS employees — names redacted — who are detailed to work at the center. 

Emails obtained by American Oversight between IRS employees, including one assigned to the Tax Exempt and Government Entities division and another assigned to Criminal Investigations, also reference a “Violent Anarchist Task Force Working Group Meeting.” The org charts, dated May 20, show that two attorneys from the DOJ’s Office of the Deputy Attorney General — the nerve center that runs the Justice Department — are a part of the Joint Mission Center.

The records reveal details of the architecture that federal law enforcement has built to implement NSPM-7 and fight “Antifa,” the loose network of anti-fascist activists that the administration has deemed a terrorist threat. The records are heavily redacted.

Massie, Khanna Say They Have Secured 218 Signatures for New Epstein Files Vote

MTN: “Reps. Thomas Massie, R-Ky., and Ro Khanna, D-Calif., announced Thursday that they have secured commitments for the 218 signatures needed to force a House vote on the Epstein Files Transparency Act II. The announcement comes just hours after MeidasTouch reported that the discharge petition had reached 216 signatures, leaving Massie and Khanna just two short of the 218-member threshold. At the time, every House Democrat except Reps. John Garamendi of California and Adam Smith of Washington had signed. 

According to Khanna, those final two signatures are now accounted for. “Thomas Massie and I have defied history for a second time, securing 218 signatures on Epstein 2.0,” Khanna said in a video Thursday. Khanna said four Republicans had joined the effort and that the two remaining Democrats had been sick and would sign when Speaker Mike Johnson calls the House back into session. Massie made the same announcement, saying the four Republicans backing the petition are himself and Reps. Brian Fitzpatrick of Pennsylvania, Ralph Norman of South Carolina and Nancy Mace of South Carolina.

Four Republicans have signed the Epstein Files II discharge petition!” Massie wrote. “When we return from recess that Speaker Johnson imposed until the election, Rep. Ro Khanna & I will have 218 names required to force a vote!”

 

Exposing the Trump Family’s Unprecedented White House Cash Machine

Parnas Perspective: “Donald Trump did not just return to the White House in 2025. He returned to it as a business opportunity, and eighteen months in, the numbers show just how thoroughly he and his family have treated the presidency as a revenue stream rather than a public trust. Trump’s personal wealth has ballooned by more than 165 percent since his second inauguration, reaching an estimated $6.3 billion. His overall revenue jumped to at least $2.2 billion in 2025 alone, compared with a minimum of $622 million the year before he took office, according to his own financial disclosure. No American president in the 250-year history of the office has ever converted the job itself into personal income at this scale, and the money trail runs through crypto exchanges, defense contractors, foreign sovereign wealth funds, Wall Street trading desks, and a growing list of corporations writing checks to his pet projects…”

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Hackers Stole Flock’s Camera Software, Revealing How the Company Tracks Cars and People

404 Media: “Hackers ripped down a Flock camera above a roadway, made a near-complete copy of the data stored inside it, and shared the files with 404 Media and WIRED, revealing in new detail how exactly Flock Safety’s cameras track the movements of both vehicles and people. The hackers say they are also publishing details on how they managed to obtain the software, in the hopes that other people may copy them. 

The breach provides an unprecedented look inside a system that Flock has described as protected by on-device encryption. The hackers were able to copy the camera’s storage and recover an encryption key stored on the device, which unlocked videos of thousands of vehicle detections. The hackers shared the material with 404 Media and the transparency nonprofit Distributed Denial of Secrets, which shared the data with WIRED. 404 Media and WIRED then analyzed those files as part of a joint investigation. 

While much of the automatic license plate reader’s (ALPR) most sensitive storage remained encrypted and inaccessible, the joint analysis of the recovered data shows that software running on the device explicitly detects people as well as vehicles, license plates, and bicycles. The camera can produce dozens of images of a single passing vehicle and, according to several weeks of recovered logs, generated more than a million images. Its computer-vision software also sometimes isolated bumper stickers and other graphics, including, in one case, an American flag patch on a motorcyclist’s saddlebag…”