Overview
- The government directed the Australian Securities and Investments Commission to increase regulation of PwC, KPMG, Deloitte and EY, announcing the step on Thursday and saying new powers or structural options remain under consideration.
- ASIC will review internal and whistleblower complaints about audit conduct across all four firms and continue a separate, ongoing investigation into allegations that KPMG staff misused confidential client information to pursue business.
- KPMG has disclosed that more than two dozen employees used AI to cheat on internal exams and the firm has seen senior departures and job cuts after allegations over misuse of client data surfaced.
- Earlier scandals that helped prompt the move include PwC’s 2023 tax-advice leaks, an academic finding that a Deloitte report contained AI-generated fabrications, and the sacking of two EY employees for allegedly accessing the prime minister’s banking details.
- Policymakers are weighing options from tougher enforcement and bigger fines to structural remedies such as breaking up firms, a debate that could change how audits and consulting are delivered and worsen near-term talent and capacity pressures in Australia and New Zealand.