KPMG Australia Cuts Nearly 400 Jobs Amid Audit Leak Scandal That Triggered Government Contract Ban

KPMG's Australian arm announced on Aug. 24 that it will cut nearly 400 jobs after a scandal over misused confidential documents got the firm banned from bidding on federal government contracts.

The firm reported annual revenue of AU$2.5 billion (US$1.79 billion) for fiscal 2026, down 1 percent from the prior year, according to the Epoch Times. New CEO John Sams said market conditions are expected to stay tough into fiscal 2027.

"We expect difficult market conditions to continue in financial year 2027 and beyond," Sams said.

The Cuts

KPMG will eliminate 27 partner positions and roughly 360 staff jobs, a 5 percent reduction in its local workforce. Most of the losses will hit the consulting and business services division, which saw revenue drop 16.9 percent as governments across Australia continued pulling back on consultant spending.

Audit and assurance revenue rose 11 percent and tax and legal revenue climbed 10.9 percent, meaning four of KPMG's five business lines actually grew in fiscal 2026. Partners still took a hit regardless. Average equity partner pay fell 13 percent year over year.

"This result reflects the resilience of our business and, above all, the commitment of our people in a very challenging year," Sams said, adding the firm will "continue to monitor performance closely, act when needed and consider carefully how the firm needs to be set up for the future."

The Scandal Behind the Ban

The job cuts follow a federal government parliamentary committee hearing in June that exposed misconduct inside KPMG's audit business. According to the Epoch Times, some executives misused confidential board papers to win new audit contracts and mistreated a whistleblower who raised concerns about the practice.

Greens Senator Barbara Pocock, a member of that committee, referred KPMG to Australia's National Anti-Corruption Commission over the conduct. No charges have been filed and no findings of corruption have been made public. This is an allegation under referral, not a conviction.

The fallout has already claimed KPMG's top leadership. Former CEO Andrew Yates and former chair Martin Sheppard both departed the firm as the scandal widened.

Australia's federal finance department has banned KPMG from applying for new government contracts until at least the end of September 2026, while it completes its own review of the firm's conduct. Several state governments have separately frozen their own dealings with KPMG. The firm currently holds 297 active federal contracts worth AU$653 million, contracts that predate the ban and remain in effect while the review continues.

Sams said internal and external reviews of the firm will wrap up in the coming months and will "inform the next phase of our action plan." He added: "We know there is more to do."

Broader Pressure on Big Four Firms

KPMG isn't the only major consultancy under the microscope in Australia. Deloitte was forced to refund the Australian government roughly AU$440,000 after a report it produced contained multiple AI-generated errors, a separate embarrassment for the consulting industry that has fed into broader political pressure. Australian lawmakers have floated the idea of splitting up the so-called Big Four firms: Deloitte, PwC, EY and KPMG, over what one government review called "unacceptable" behavior in how consultants operate alongside their audit and assurance work.

The core tension is straightforward. These firms audit companies and governments while also selling those same clients lucrative consulting contracts, a conflict of interest structure that critics on both sides of the political spectrum have flagged for years. Defenders of the current model argue the firms operate under professional independence rules and internal walls meant to separate audit judgment from consulting sales, and that isolated misconduct by individual executives isn't proof the entire structure is broken.

What's not in dispute is the money. Australian taxpayers have funneled hundreds of millions of dollars into KPMG contracts alone, and that spending is now under direct government review. An answer is expected by the end of September on whether the firm's federal contract ban continues, is lifted, or gets replaced with something stricter.