The leaders of a high-profile consultancy face a grilling from a powerful federal oversight committee after making an 11th-hour decision to withhold information from their interrogators.
KPMG, which has more than half a billion dollars in taxpayer-funded government contracts, is feeling the heat over an audit leak scandal and the treatment of a whistleblower, raising concerns about its governance and integrity frameworks.
Ahead of Friday's hearing, it told the committee it would not provide the requested documents linked to those matters because they were confidential, subject to professional privilege and could prejudice the "administration of justice".
"We appreciate that this is not the response the committee was seeking," chairman Martin Sheppard wrote in a letter tabled by Labor's Deborah O'Neill, the committee chair.
"We remain committed to engaging with the committee in an open and co-operative manner, but need to balance this against parties’ legal rights and the need for due process."
Clerk of the Senate Richard Pye told Senator O'Neill in a response that the parliament could investigate KPMG for potential contempt if denied further attempts to release the documents.
Senator O'Neill will respond to KPMG's decision on Friday.
But Australians expected KPMG to be transparent, committee member and Greens senator Barbara Pocock said.
“If KPMG decides to use legal professional privilege to dodge transparency and accountability, they will be showing a total disdain for the parliament and the Australian public,” she told AAP.
Senator Pocock has referred KPMG to the National Anti-Corruption Commission.
KPMG, one of the top four consultancies in the world, is accused of sharing confidential corporate client information internally in 2023 to win audit tenders and mishandling the complaints of a staff member who raised the alarm.
KPMG Australia boss Andrew Yates and audit head Julian McPherson have resigned over the whistleblower issue.
KPMG has also set up a new independent review into its practices and apologised to the whistleblower.
Mr Yates and Mr McPherson will be among the 35 witnesses appearing before the Joint Committee on Corporate and Financial Services in Canberra in a continuation of a May 29 oversight hearing into the corporate regulator.
First up will be Lendlease chief executive Tony Lombardo, who confirmed in an April letter to the committee that its auditor KPMG had contacted the building company in 2025 about the allegations made by a whistleblower.
These included that "various personnel" had used information in board papers to tender for other audits.
At the time, KPMG told Lendlease "there was no issue" before reaching out this year to say the documents had been viewed by a team tendering for Westpac's audit, which it won.
"Lendlease has advised KPMG that the actions of its employees are not acceptable," Mr Lombardo wrote.
The company plans to put its auditing contract out to tender in 2027.
The ensuing political storm centred on confidentiality issues, given KPMG handles sensitive public service contracts for the federal and various state governments.
Most of Friday's hearing will be taken up with evidence from 13 KPMG leaders, including Mr Sheppard and interim Australia boss Stan Stavros.
Meanwhile, the finance department has set up its own review and placed a three-month moratorium on KPMG bidding for new contracts.
The federal government has 297 active contracts with KPMG valued at $653 million.
It's not the first time Australia's professional services sector has come under scrutiny.
In 2023, PwC was found to have shared confidential government information with prospective clients.
It was banned from new contracts for more than a year and ended up selling its government advisory business for $1.
