Australian Ethical drops KPMG as auditor
Australian Ethical has decided to end its 13-year relationship with KPMG as its external auditor and has opened a competitive tender process for the position.
The new audit provision will start from FY28 onwards, with shareholders set to vote on the successful firm’s appointment at the AGM in November 2027.
The decision comes after scrutiny of KPMG’s audit practices, including information exposed by the Parliamentary Joint Committee on Corporations and Financial Services.
Steve Gibbs, Australian Ethical chair, stated that while KPMG has served the company well, it is the right time to run a competitive tender for the external audit.
Gibbs is set to depart the board next year after 14 years as its chair, and his successor has yet to be decided.
Although KPMG has an Action Plan to address its governance, culture, and ethics, it will not be invited to participate in the tender.
ASIC chair Sarah Court mentioned that there are several investigations into KPMG underway, including alleged misuse of confidential client information and whistleblower victimisation concerns.
Australian Ethical’s move follows a similar decision by ANZ to end its relationship with KPMG, which had been in place since 1969.
ANZ intends to conclude its competitive tender process by the end of April 2027, with the new external audit services firm expected to commence in financial year 2029.
In its quarterly results for the three months to 30 September, Australian Ethical reported that its funds under management (FUM) fell slightly from $14.5 billion to $14.4 billion.
The company attributed this decrease to positive superannuation net flows, with super FUM rising from $10.4 billion to $10.5 billion during the quarter.
Managing director John McMurdo stated that the first quarter demonstrated the continued momentum and resilience of the business, despite challenging investment markets and some wholesale redemptions.
The company remains focused on attracting and retaining super members, expanding its reach in the middle market, and delivering long-term value for customers and shareholders.
For Australian Ethical, this change in auditor may lead to increased transparency and accountability, as the company seeks to reassure its stakeholders and maintain trust in its financial reporting.
