Updates throughout; adds comments from EY, PwC and Deloitte

By Scott Murdoch and Shivangi Lahiri

July 9 (Reuters) - Australia's corporate regulator has launched a review of audit conduct complaints at the Big Four audit firms, widening its scrutiny of the sector after allegations that KPMG staff misused confidential information to win contracts.

The probe comes as Australia's Treasury consults on tougher regulation of large accounting, auditing and consulting firms, including possible reforms that could expand the corporate regulator's role.

The government has also said it is considering options including breaking up the Big Four after repeated controversies in the sector.

The Australian Securities and Investments Commission (ASIC) said on Thursday it would examine internal and whistleblower complaints about audit conduct, including the misuse or sharing of confidential information, while continuing a separate investigation into specific allegations involving KPMG.

"The allegations concerning KPMG are serious. ASIC will use the existing suite of limited powers available to us, while continuing to engage constructively with the government's reform process," ASIC Chair Sarah Court said.

The move adds pressure on an industry already facing closer oversight after a series of scandals.

KPMG Australia has faced whistleblower allegations that it used confidential client data to win lucrative contracts, while PwC Australia was hit three years ago by a scandal involving the sharing of confidential government information with prospective clients.

Spokespersons from PwC Australia and EY Australia said on Thursday their firms would cooperate, while Deloitte declined to comment. KPMG did not immediately respond to a Reuters request for comment.

ASIC will continue its "significant investigation into specific allegations of misuse of client confidential information at KPMG", the commission said.

The regulator said its powers over partnership-based audit firms were limited under current law, unlike its broader authority over corporations such as listed companies.

"ASIC's jurisdiction in relation to audit firms, as opposed to individual auditors, is limited," Court said.