An audit of audits: KPMG has audited 19 companies for 20 years or more

Aug 13, 2026

Almost one in four of the country’s top 300 listed companies has had the same auditor checking their books for more than 20 years, raising serious doubts about the reliability of their accounts.

Proxy adviser Ownership Matters examined the accounts of the ASX 300 for the past nine years and tracked changes to so-called “key audit matters” – the auditor’s list of the key risks facing the company.

It found that bringing in a new audit firm resulted in changes to key audit matters 74 per cent of the time, compared with 57 per cent where there was no change, and 63 per cent where the audit firm stayed the same but a fresh audit partner was brought in.

“These findings provide empirical evidence that audit firm changes, rather than partner rotation alone, are the mechanism most associated with changes in reported audit focus,” said Ownership Matters.

In an illustration of this research in action last year, Deloitte discovered material errors in the books of Corporate Travel Management within a year of replacing long-time auditor PwC.

Audit partners must rotate every five years by law, but there is no limit on the tenure of firms.

Ownership Matters said the effectiveness of the external audit was fundamental to maintaining investor confidence in the capital markets.

“Where auditors fail to exercise sufficient professional scepticism or detect material misstatements or deficiencies in financial reporting, inaccurate financial information may be disseminated to the market, resulting in capital misallocation, investor losses and significant consequences for affected companies,” it said.

“The big four are responsible for auditing about 90 per cent of the ASX 300.”

The shareholder advisory firm said the federal government should adopt British rules requiring listed companies to put their audit out to tender every 10 years and rotate audit firms at least once every 20 years.

Ownership Matters said 67 of the ASX 300 companies had not changed their auditor in 20 years. KPMG had audited 19 companies for 20 years or more, including Lendlease for almost 70 years, ANZ for almost 60 years and Ampol for 45 years, it said.

Lendlease said in June it would drop KPMG as its auditor amid the firm’s audit scandal. This week two more listed companies announced they would replace KPMG as auditor pending shareholder approval.

On Tuesday, mortgage insurer Helia said it would replace KPMG with Deloitte after more than a decade, while insurer Suncorp broke with KPMG after 30 years, announcing EY as its preferred new auditor.

*Based on the most recent audited accounts as of June 2026
**Planning to change auditor
Source: Ownership Matters

Push to split firms back on agenda

The federal government is exploring tougher regulation of the big consulting firms after the PwC tax scandal in 2023, which involved the sharing of confidential government data.

Treasury released an options paper in July, after a two-year delay, on the heels of the KPMG audit scandal which involved the misuse of confidential client data.

Treasury canvassed potential reform options, ranging from giving the Australian Securities and Investments Commission power to fine firms through to forcing a split of their audit and consulting businesses.

While the government seems likely to increase oversight by ASIC, attempts to mandate firm rotation, split the firms or limit consulting services sold to audit clients will be strongly resisted by the industry.

Ownership Matters said big four accounting giants should split their audit and consulting divisions to improve independence – a reform that industry critics have urged since the 2001 collapse of Enron.

The big four are responsible for auditing about 90 per cent of the ASX 300 companies and capture 99 per cent of the $800 million in annual audit fees and more than $200 million in non-audit fees.

“A concentrated audit market, combined with long-standing auditor-client relationships, may create challenges in maintaining auditor independence and investor confidence,” said Ownership Matters.

“This data indicates that, for listed entities, the commercial relationship with major audit firms is predominantly centred on the provision of statutory audit services rather than non-audit services.

“Accordingly, structural separation of audit and consulting services would be unlikely to materially disrupt the economics of listed entity audit engagements, while potentially improving both actual and perceived auditor independence.”

It said an audit-only firm would be able to hire whatever “specialist non-audit expertise” was required for local and international audits.

The big four have previously warned that they need access to non-audit skills within their advisory arm to conduct modern audits. They also say the broader advisory arms provide additional income required to fund investments in advanced audit technologies.

Watchdog like a regulatory ‘cocker spaniel’

Ownership Matters also took aim at the regulator, saying ASIC needed to recruit more staff to beef up its audit quality regime.

It noted the regulator had pared back its surveillance program to the point that it reviewed only 15 audit files across 11 firms in 2024-25, down from 93 files from 23 firms in 2015-16.

This was the regulatory equivalent of “leaving a cocker spaniel to supervise toddlers at the pool”.

The proxy firm also wants to stop listed companies giving financial indemnities to external auditors, after finding that more than 100 companies on the ASX 300 specifically provided some form of damage limitation to their external auditor.

“By limiting the financial consequences arising from audit failures, such arrangements may shift potential costs from auditors to companies and, ultimately, shareholders – the stakeholders the audit function is intended to protect,” it said.

[Australian Financial Review]