KPMG is the subject of an inquiry over the alleged misuse of client data and the subsequent handling of a whistleblower's complaint. (ABC News: Maren Preuss)
The Australian Securities and Investments Commission will appear before a parliamentary inquiry on Friday.
The regulator is expected to face questions about how it responded to whistleblowers reporting alleged misconduct by accounting firm KPMG.
A KPMG whistleblower says the Australian Securities and Investments Commission (ASIC) has to be "dragged kicking and screaming" to investigate alleged misconduct disclosures at the accounting firm.
The regulator is being hauled before Friday's parliamentary inquiry, which is investigating how KPMG audit partners allegedly misused client data and then mishandled a whistleblower's complaint about it.
The inquiry has since heard from other whistleblowers at KPMG and other big four firms.
ASIC is expected to face tough questions about how it has responded to whistleblowers making, or attempting to make, disclosures about alleged misconduct at accounting firms.
In December 2021, another KPMG whistleblower wrote to ASIC about separate claims that the firm may have breached corporations law.
In an email to ASIC in June, the whistleblower detailed how ASIC rejected their earlier attempt at making a disclosure, alleging non-compliance by KPMG over audit transparency, and accusing the regulator of taking a "condescending tone" in communication with them.
This, the whistleblower said, "reflects a very poor attitude to whistleblowers and whistleblowing" at ASIC.
ASIC representatives will appear at Friday's hearing into the KPMG audit leaks scandal.
"What has become increasingly — and I think close to undeniably clear — is that an improper state of affairs exists in relation to 'regulated' KPMG entities, and that this state has existed for some time.
"That is, KPMG benefits from improper regulatory restraint, or potentially curtailment, by ASIC, which appears to be in part due to an improper relationship with ASIC."
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The whistleblower expressed concern that there could be a situation where another "already existing regulator will compensate for ASIC, which is neither their job nor a desirable thing".
