ASIC - Investigation into KPMG audits

Question

Senator BARBARA POCOCK: Thanks for being here. You mentioned in your opening statement, Chair, that you have a preliminary investigation with KPMG underway. What correspondence has ASIC had with the KPMG chair, Martin Sheppard, about the audit scandal? Ms Court: Just one clarification: I think I gave evidence last week that we had commenced a preliminary investigation. We've now commenced a formal investigation, this week, in relation to KPMG and a number of the registered company auditors that sit within it. Now, in terms of the correspondence that we have had with Mr Sheppard, or with KPMG, there has been a significant amount of interaction between ASIC and KPMG at the most senior levels, and also some meetings. In terms of the actual dates and the number of letters, if I could take that on notice-but I can assure you that ASIC has been engaging proactively with KPMG and that that level of engagement has intensified. Senator BARBARA POCOCK: Your statement this morning used the word 'preliminary', but it is now formal. Is that correct? Ms Court: Yes. I think when I spoke I might have removed the word 'preliminary', but it's probably still in the opening statement. So my apologies. Senator BARBARA POCOCK: So it's formal. I would like, on notice, that correspondence, also, with the prior CEO, Andrew Yates, and with the new acting CEO, please. Ms Court: Yes, we can provide-in fact, we can provide a chronology of our interactions and when they've taken place. I think it's fair to say, just in terms of the high-level chronology, obviously we were aware of Senator O'Neill's statements in the Senate on 24 March. We had a meeting with KPMG on 14 April. That was prior to an investigation commencing. We then commenced a preliminary investigation on 21 April. So we had a look at and a think about that information. Then our preliminary investigation commenced. We received information from KPMG on 29 April, which alerted us to the fact that there were some individuals that were being investigated by KPMG, including three registered company auditors that it was proposing to sanction. There was a flurry of activity-as, no doubt, the senators will recall-last Friday, when the then CEO and head of audit resigned. Since that time, we have commenced our formal investigation, earlier this week, and I should also make clear that we have issued multiple compulsory notices throughout that period to KPMG, and the formal investigation is underway.

Answer

See attached response.

Documents

• Question with answer (PDF) (opens in a new tab)
• SQ26-000475 ASIC - Investigation into KPMG audits.pdf (opens in a new tab)