A KPMG Australia partner was fined A$10,000 for breaching company policy by using AI tools to complete an internal AI training exam.
The firm identified 28 employees who misused AI in internal assessments this financial year.
The issue drew regulatory and political attention, with Greens senator Barbara Pocock criticising self-reporting rules.
A senior partner at KPMG Australia has been fined A$10,000 (around $7,000) for using artificial intelligence (AI) tools to complete an internal training course on AI, according to a report by the Australian Financial Review (AFR).
The unnamed partner, a registered company auditor, took part in the AI training programme in July 2025, which required participants to download a reference manual. However, the partner reportedly breached company policy by uploading the internal document to an AI tool to help answer an exam question.
3 February 2026
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KPMG told AFR that 28 employees, including the partner, were found to have used AI tools improperly in internal training assessments during the current financial year (FY25-26). The remaining 27 employees were at manager level or below.
The company's Australia CEO Andrew Yates reporteldy acknowledged the challenge of managing AI use within the firm. "It’s a very hard thing to get on top of given how quickly society has embraced it," Yates told the publication.
He said the company introduced monitoring systems in 2024 to detect AI use during internal tests and later launched a firm-wide education campaign. The firm has also implemented technology measures to block access to AI tools during exams.
"Our tests are open-book knowledge checks following internal training courses," Yates said. "People are allowed to download training materials to assist with the test. But they are prohibited from uploading those materials into AI tools to assist them do the test," he added.
The matter gained public attention after senator Barbara Pocock of the political party Australian Greens raised questions about the issue during a parliamentary inquiry last week, according to the Financial Times.
Point to note: Under current Australian regulations, audit firms are not required to automatically report such internal misconduct to the Australian Securities and Investments Commission (ASIC). Instead, individual partners are expected to self-report to professional bodies.
According to AFR, KPMG said it had voluntarily informed ASIC as part of ongoing discussions. However, ASIC reportedly told Senator Pocock that it had not received a formal report from KPMG before some of the cases were revealed in media reports in December 2025. The regulator later contacted KPMG, after which the firm provided additional information.
Senator Pocock had earlier criticised the current system, calling for stricter reporting rules. "Self-reporting unethical behaviour–what a joke. The current reporting regime isn't just inadequate, it's a joke. We need greater transparency and stronger reporting mechanisms," she said.
Notably, this is not the first controversy involving AI use at major accounting firms. According to the Financial Times, all of the Big Four firms have faced penalties in recent years over cheating-related scandals. In one recent case, Deloitte Australia agreed to partially refund the Australian government after submitting a report that contained numerous errors and was prepared using AI tools.
