Sunita Somvanshi
KPMG Australia announced it will sack dozens of partners and approximately 1,000 staff members as the firm faces the fallout from a major audit scandal that has triggered a parliamentary inquiry and put government contracts at risk, according to reporting by the Australian Financial Review published July 29, 2026.
The mass restructuring follows the revelation of a “secret stash” of client files that KPMG allegedly maintained separate from its standard document management systems — a practice that raised serious questions about audit integrity and professional obligations under Australian accounting standards.
KPMG Australia was called to appear before a parliamentary inquiry investigating the firm’s conduct, where lawmakers questioned the audit practices and whether the firm met its obligations to clients and the public. The inquiry’s findings are expected to influence government decisions about whether to restrict KPMG from bidding for federal contracts.
The South Australian government made an early determination on its own exposure to the scandal, announcing a decision on whether to ban KPMG from state contracts as the firm’s mass restructuring was becoming public. Such government contract bans represent a significant financial consequence for the Big Four accounting firm, which derives substantial revenue from public sector consulting and audit work.
KPMG Australia issued a statement acknowledging the job cuts and characterizing the restructuring as a necessary step to rebuild the firm’s culture and restore trust with clients and regulators. The firm said it was cooperating fully with the parliamentary inquiry.
The scandal is the most significant governance crisis to hit one of Australia’s Big Four accounting firms in recent memory. Australia’s Australian Securities and Investments Commission (ASIC), the corporate regulator, has its own investigation into KPMG’s conduct running parallel to the parliamentary inquiry.
