A review found KPMG Australia’s handling of whistleblower allegations reflected broader cultural and governance weaknesses that had persisted for years. (KPMG filepic)SYDNEY: A probe into KPMG Australia has found it mishandled whistleblower allegations of client data leaks and let cultural and governance weaknesses persist for years, but stopped short of recommending a permanent ban on the firm from federal government work.

The finance department, which commissioned the review by former bureaucrat Ian Watt, said KPMG has instead agreed to not bid for new federal work until the end of February while the firm undertakes further governance reforms, extending a pause in place since June.

"The review considers that KPMG should not be treated as permanently unsuitable for Commonwealth work, but nor should confidence be restored on the strength of assurances and encouraging early signs alone," it said.