Our 2020 Transparency Report outlines how we drive audit quality, our systems of quality control, and how we are working to improve it. The 2020 KPMG Australia Transparency Report covers our financial year to 30 June 2020.
Almost every aspect of auditing has had to be revised or reviewed this year, given the unique circumstances companies and auditors found themselves in. For KPMG, our response to the COVID-19 global pandemic was far more than simply implementing temporary measures to address restrictions. We have fundamentally altered the way our auditors work and how we provide services to our clients in this new environment.
We believe we have risen to the unique challenges by focusing on our people’s wellbeing throughout, revising our approach to both physical and judgemental auditing issues and equipping our teams with the tools and support necessary for them to do their jobs.
With the pandemic creating such uncertainty, we believe the role of audit is now more important than ever, and that auditors should therefore strive to explain our work and how we go about it. Indeed, how an audit is conducted is as important as the final result.
We are pleased to present our Transparency Report for 2020, which outlines how we are working to maintain and improve audit quality.
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The release of ASIC’s Audit inspection reports today show an improvement in the largest six firms’ average – from 26 percent (for FY19) to 24 percent this year. (Note: the lower the score, the better.) Pleasingly, our own result has also improved – from 33 percent in FY19, to 26 percent now – indicating that the steps we are taking to improve audit quality are working.
ASIC’s inspection this year covered 11 of the more complex audits we undertook during FY18 and FY19, from more than 5,000 audit opinions we sign annually. None of the inspection comments resulted in the re-issuance of the audit opinion, or a re-statement of the company’s financial statements.
We welcome ASIC’s independent view as it helps inform the way we can continue to strengthen and improve our processes. We have already considered ASIC’s inspection comments and better practice recommendations in detail, and developed responses and action plans.
Teams continue to work hard to enhance the quality and efficiency of our audit work. In FY21 we are progressively launching our new global digital audit workflow (known as KPMG Clara Workflow) to further enhance audit quality. While there may be continued volatility from year to year in future inspection results, we expect to see further positive impacts from these changes.
Please find following KPMG Australia’s ASIC Audit inspection report, in full: