KPMG Australia chairman Martin Sheppard is to leave the firm as part of a management shake-up that includes the departure of audit partners Paul Rogers and Eileen Hoggett and the appointment of the firm's first independent chairman.
The changes, which were announced on 23 June 2026, mark the latest expansion in KPMG Australia's response to breaches relating to client privacy and reporting management. Sheppard will stay for a short transition period before leaving the company and stepping down from his regional board responsibilities.
Rogers and Hoggett are also leaving KPMG Australia. Both had already been identified as subjects of an investigation by the Australian Securities and Investments Commission related to the audit controversy. Hoggett stepped down as chief executive officer, while Rogers remained as an auditing partner.
The latest departures follow the earlier resignations of chief executive Andrew Yates and head of audit Julian McPherson. Stan Stavros is serving as interim CEO while KPMG continues its search for a permanent CEO, who will be expected to refresh the senior team.
KPMG's planned management changes go beyond senior staff replacements. The company intends to appoint an independent chairman and add independent members to its Australian board, creating a balance between outside directors and KPMG representatives. The money issued by the board will be reviewed, with independent members participating in the committees responsible for the quality of the audit, ethics, control of the report and other activities related to the public interest. The structure represents a significant change in the relationship where senior leadership was previously appointed within the firm. Independent oversight should create greater distance between those responsible for commercial performance and those assessing ethics, risk and research quality.
Principia Advisory has been appointed to conduct an independent retrospective review of KPMG Australia's whistleblowing system. The company is committed to publishing findings and revising its policies governing how disclosures are identified, escalated and managed. Extensive intensive training will accompany the changes.
A separate external review will examine the handling of the report's complaint and subsequent failure. KPMG also plans to appoint a third party to monitor progress with its implementation plan and publish periodic updates. The Commonwealth Treasury is conducting its own independent review, which KPMG said it would cooperate with.
The reshuffle follows KPMG's admission at a parliamentary hearing that confidential Optus data was shared with an internal team seeking to audit Telstra. That disclosure added to a controversy that had already centered on allegations involving confidential customer information and the company's previous failure to substantiate whistleblower complaints.
Regulations regarding the pursuit of audits will now be amended, ethical barriers will be strengthened and confidentiality training will be made mandatory for every company. Audit partners and directors will receive additional targeted training including client confidentiality, privacy and information protection.
Changing leaders will not solve the questions facing KPMG Australia. Audit committees, regulators and public sector clients will want evidence that confidential information is properly classified, callers are protected and senior staff face consistent consequences when controls fail.
The independent chairman and new outside directors will inherit the responsibility to demonstrate that the revised framework can challenge management rather than simply endorse internal decisions. KPMG's credibility will depend on the publication of review findings, tangible progress against the action plan and evidence that governance is changing behavior across the partnership.
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