KPMG Australia will remain excluded from new Commonwealth government contracting until 28 February 2027, extending restrictions imposed in June following allegations that senior audit partners misused confidential client information.
The Australian Department of Finance confirmed the extended restrictions in an updated procurement notice dated 3 November.
The decision follows an independent review led by Dr Ian Watt, which identified serious weaknesses in KPMG’s ethical culture, governance and handling of whistleblower allegations.
The review found that the firm’s response to concerns about the misuse of confidential client information was fragmented, poorly coordinated and insufficiently focused on establishing what had occurred.
It also identified broader cultural weaknesses, including an excessive emphasis on financial returns, reluctance to challenge senior figures and inadequate accountability.
Restrictions remain in place
The extended agreement prevents Commonwealth entities covered by procurement rules from entering into new contracts with KPMG arising from tender processes closing before 1 March 2027.
The restrictions also cover arrangements in which KPMG would participate as a subcontractor.
Existing contracts can continue, with variations and extensions permitted subject to approval. Certain software licensing arrangements are also exempt.
The implications extend beyond the federal government. Western Australia has extended its own restrictions on KPMG bidding for new government work until 28 February 2027.
Financial and reputational consequences
Commonwealth government work generated A$207.1 million for KPMG in the 2026 financial year, representing approximately 9.5% of its revenue, according to Reuters.
The firm has also lost government contracts. In October, officials confirmed the early termination of an Australian Public Service Commission ethics training contract, adding to the fallout from the scandal.
KPMG has accepted the independent review’s findings and committed to implementing reforms.
The Department of Finance expects an implementation plan and quarterly progress reports before determining whether sufficient progress has been made to restore confidence in the firm.
The extended contracting restrictions are the latest development in a scandal that has exposed significant weaknesses in KPMG’s governance, ethical culture and whistleblower protections.
Related Reading
KPMG Australia’s Ethics Paradox: Selling Integrity, Failing Its Own Whistleblower
KPMG Australia Announces New Integrity Office as Governance Reforms Expand
How KPMG Australia Misled Its Whistleblower, Directors and Parliament
This is part of Big4News’ continuing coverage of the KPMG Australia Audit Leak Scandal.
KPMG Australia Audit Leaks Scandal
The KPMG Australia audit-leaks scandal, which erupted publicly in March 2026, has developed from a whistleblower’s contested allegations into an established pattern of misconduct, investigative failure and governance weakness. It represents one of the most serious integrity crises to hit the Big Four in Australia since the PwC tax leaks affair.
About the author: Claudine Cassar is the founder and editor of Big4News, covering audit, consulting, regulation and governance across Deloitte, PwC, EY and KPMG.