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Chapter 1: What is the main topic discussed in this episode?
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There's been a story bubbling away recently that sent corporate tongues wagging about the goings on at one of the country's biggest accounting firms, KPMG. It's to do with a former employee who blew the whistle on how the company was using the confidential data of its clients. Some are major corporations and the fallout has led to a public inquiry and several executives being shown the door.
So in this quiz shortcut, we'll get you across what it's about and why it's getting so much attention. Squeeze Shortcuts is the backstory to the big news stories. I'm Alice Dempster.
And I'm Larissa Huntington.
Larissa, zeroing in on what's going on in the offices of a big accounting firm isn't normally our bag, but stay with us because this isn't just any company that we're about to dive into.
Yeah, that's right. It's KPMG we're talking about. We haven't had a chance to cover this one in the Squeeze Today podcast yet. That's been a bit going on, but it has been around and they're one of the largest accounting firms in the country. They keep the financials of some of our biggest corporations and government departments in check and
And to do that, they employ around 10,000 Aussies in offices around the country. And they've got an annual revenue of more than $2 billion. It's a huge business. So when serious allegations are raised about their conduct, I guess it gets attention.
Yeah. Yeah, the fallout stands to impact a lot of people and there's a heap of money at stake with big name companies like the developer Lendlease, Westpac, property firm Dexus and Telcos Optus and Telstra all being mentioned.
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Chapter 2: What recent allegations have emerged against KPMG?
But before we go further, let's step it back a bit by starting with what KPMG actually does.
Right. So aside from basic accounting, one of their other major services is auditing. And that's where they check company financial records to make sure that they're all correct and in order. And they also give tax advice and offer consulting. Essentially, they act as expert advisors to help organisations run efficiently and above board. So there's a lot of trust involved in this.
They get access to the financials and strategies of really big companies. So It wasn't a great look when a former staffer blew the whistle and claimed that some of their practices were very much not above board themselves.
Yeah, so those allegations are mainly centred around how they shared and used the confidential data of their clients. And they came to light when Labor Senator Deb O'Neill, she chairs the Joint Committee on Corporations and Financial Services, gave a speech to Parliament back in March under parliamentary privilege.
She did, and using parliamentary privilege is significant because allegations shared by politicians under it are protected from defamation or other legal action, for instance, stemming from somebody breaching a non-disclosure agreement. And it not only covers the politician, it extends to the whistleblower as well.
We don't know that much about him, except that he was a senior executive and he worked in auditing.
So let's get into what he's alleged now. He says that senior partners took highly sensitive confidential boardroom documents from an existing client, Lendlease, and shared them with other staff to help KPMG pitch for new lucrative auditing contracts with other major companies. They include Westpac and Dexus.
Yeah, he also says that that happened with data from Optus, which was allegedly shared with staff who were bidding for the contract to audit its rival, Telstra. And this is an issue because accounting firms have to keep strict ethical walls between all of their different corporate clients.
And KPMG is accused of just bypassing that rule and basically using that information for its own ends to give it an unfair advantage when it was competing for new contracts.
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