Striving to deliver the highest level of quality is at the heart of everything we do at KPMG. It’s more than just a priority for us — it’s a core part of the purpose that drives us. Consistently providing exceptional quality in every aspect of every project we undertake across our growing global organization of more than 219,000 people in 147 countries and territories is fundamental to our continued success.
Now, at a time where businesses in every sector grapple with rapid change, heightened scrutiny and unprecedented digital transformation, quality of thinking and delivery are more important than ever. Our mission is to maintain only the highest standards and to respond proactively and intelligently to any challenges that arise.
The duty of our auditing business is to serve the public interest. Audit quality is critically important to maintaining integrity and public trust in our profession amid the intense and unprecedented scrutiny we face today. Quality essentially means doing the right thing and it remains our highest priority. We are determined to set the standard for audit quality across our profession.
Articulating a clear definition of audit quality is critical to driving a consistent approach across KPMG globally. How do we define audit quality? True audit quality demands that every audit we undertake is consistently executed in line with the requirements and intent of all applicable professional standards and within a strong system of exacting KPMG quality controls.
As audit professionals, we understand our special responsibility to meet — and strive to exceed — public expectations. Continuous quality improvement is fundamental to enhancing trust and confidence among investors, regulators, our clients, our people, capital markets and the communities in which we work and live.
Responsibility for consistently delivering exceptional quality starts at the very top of our organization and requires accountability across the leadership of every KPMG team.
KPMG continues to invest significantly in audit quality. We continue to build on our sound audit quality foundations, in terms of how the organization and audit engagements are managed. This means significant ongoing investment in our quality management, global monitoring of audit quality and enhanced support, technology and tools for engagement teams. To read more about this, see KPMG International’s Transparency Report 2019.
Our new governance and leadership structures better enable us to monitor performance across the global organization. Specifically, our Global Board has implemented significant changes, including the 2018 appointment of Rod Devlin as Global Head of Audit Quality. He reports to our Global Board’s new Global Audit Quality Committee. This committee, comprising senior global partners from KPMG firms around the globe and led by Alison Kitchen, Chair of KPMG Australia, is responsible for monitoring oversight and maintaining audit quality across the global organization.
Audit quality is fundamental to maintaining public trust and is the key measure on which our professional reputation stands. We define "audit quality" as the outcome when audits are executed consistently, in line with the requirements and intent of applicable professional standards within a strong system of quality controls. All of our related activities are undertaken in an environment of the utmost level of objectivity, independence, ethics and integrity.
In addition, Rod Devlin manages a dedicated quality-monitoring group that inspects completed audit engagements as well as monitoring elements of member firms’ quality controls. On the audit talent-management front, Meredith Sorée was named Managing Director, Global People Leader, Audit.
As the profession evolves in an environment driven by complex business structures, greater reliance on data, and continued compliance with new international business standards, we are empowering our audit teams with advanced, innovative tools, support and guidance. As noted in greater detail, we are integrating a new workflow and methodology along with powerful technology to enhance the audit process through our smart audit platform, KPMG Clara.
We are making unprecedented, multi-year investments to continually advance audit quality. Our mission is to drive tangible and sustainable advances in quality and consistency throughout KPMG while enhancing accountability among audit leaders and their teams. As a global organization, we are driving the use of centralization to achieve the consistency that regulators and our stakeholders expect and deserve.
Quite simply, we are striving to be the very best at what we do. That’s our duty to clients, regulators, capital markets and the public.
We believe success starts with having the right tone at the top — leadership that inspires exceptional performance. We have an established framework for audit quality success that’s supported by strong quality controls. However, sustaining high-quality audits in an ever-changing world demands that we continuously improve within a culture of ethics, integrity, purpose and values. That’s why we’re reinforcing our audit quality foundations — both in terms of how the organization and audit engagements are managed and conducted. Learn more about this in KPMG International’s Transparency Report 2019.
As we invest in game-changing methodologies and technology innovations to enhance quality and consistency, we’ve introduced a powerful smart audit platform, KPMG Clara. This scalable platform is built on Microsoft Azure and designed to continually incorporate new technologies as they emerge and mature.
KPMG Clara brings our powerful data and analytic capabilities into one interface, allowing KPMG professionals to work smarter while interacting with clients online in real time as they conduct the audit. As artificial intelligence (AI), predictive analytics, machine learning and cognitive technologies develop, these powerful capabilities can be integrated into the KPMG Clara platform.
We are rolling out KPMG Clara across our organization and to date it is deployed in more than 100 countries and territories. This delivers a completely reimagined audit experience for our audit professionals and our clients.
The exponential rise in data and the need to manage, secure and extract value from data, combined with the fact that the companies we audit are increasingly global, means that regardless of the location, KPMG needs to provide globally consistent client solutions based on the latest technology.
KPMG Clara and Microsoft 365 are part of the most far-reaching technology programs in which we’ve invested. Deploying Microsoft 365 across the organization has been key to enabling seamless global collaboration and consistent client service delivery. Jointly, they are critical elements of KPMG’s major investment in a common digital platform. They offer cloud-based capabilities ranging from Microsoft Azure-based hosting infrastructure to more than 50 advanced digital modules such as AI, machine learning and robotics components.
With a common digital platform and intelligent use of cloud technologies, we are uniquely positioned to provide digital solutions rapidly across our organization for our clients.
Technology is a catalyst for change but at KPMG, our people are our true differentiator. As we transform our tools and capabilities to meet enhanced stakeholder expectations, we are also committed to maintaining and developing the critical new skills needed for success in the digital era. This is the KPMG culture of continuous learning.
We are investing in the ongoing development of a comprehensive learning plan designed to equip our professionals with the knowledge and confidence they need to fully leverage the opportunities KPMG Clara delivers. Our teams have on-demand access to training and guidance when and where they need it. Change is a constant and we are able to offer our teams the resources they need to meet evolving requirements around audit quality. We also continue recruiting proven technology talent for our evolving audit teams — skilled professionals who specialize in software, cloud capabilities and AI, and who can bring industry best practices to our smart audit platform.
In the hyper-competitive global marketplace in which we operate today, we are proud that our intense focus on combining top talent with next-generation technology to foster client success is having an impact. For example, we’ve been appointed as the new auditor of Swiss Reinsurance Company, the world’s second-largest reinsurance firm with more than 14,000 employees in 25 countries and territories. We’re confident that our extensive audit experience, our proven market expertise, trust in our team, and our smart audit platform, KPMG Clara, had an impact on our selection.
Our core team of professionals from Switzerland, Germany, the US, UK and Singapore collaborated to demonstrate how we capitalize on intelligent new technologies to enhance our audit quality and data-based insights.
KPMG’s Advisory function continues to invest in talent, capabilities, tools and digital solutions that drive continuous enhancements in the quality of our work and the client experience. To support our client-centric agenda in an increasingly complex and dynamic world, we are investing in a suite of content-rich, technology-enabled solutions which we believe can make a difference for many of the big issues our clients face and often struggle to solve, including:
Our accreditation program allows us to better identify the right people with the right skills to deliver exceptional results for our clients while also helping us to assess where an accreditation needs to be taken to a higher level. Built on Microsoft Azure the solution is intuitive to use and it enables us to identify and support key engagements, in real time at a global level, ultimately fostering expert collaboration and consistently high-quality delivery for our clients.
KPMG has kicked off a program to implement a global data strategy and execution approach that is designed to accelerate development and delivery of our data-based services. This includes implementing a new data ecosystem, starting with a Deal Advisory data project that’s allowing for instant and precise access to internal and external data sources.
We are also proud that KPMG’s Sanctions Alert Classifier tool, a supervised machine-learning algorithm, was recently named ‘Best Regulatory Alert Management Solution’ at the 2019 RegTech Insights Awards event. This recognizes organizations at the forefront of innovation and resourceful solutions for financial institutions. This risk solution uses AI, machine learning and other technologies to re-engineer customer due diligence, transaction monitoring and sanctions screening. It lets organizations better mitigate financial crime and third-party risk, helping reduce costs, increase quality and improve the customer experience. It’s capable of processing one million alerts per minute compared to manual processes requiring more than a month — and boasts an accuracy level of about 99.9 percent.
The pace of change in the modern tax environment demands transformational tools and new skills to adapt. Today, technology and innovation can be the difference between being on the defensive or adding value to the organization. We have long invested in developing tax technologies to help tax departments tackle regulatory change, streamline processes, turn data into value and collaborate effectively. We continue to expand these tools.
Further, we’ve introduced our Tax Reimagined methodology, which brings together our compliance, technology and transformation capabilities under a common framework, helping tax leaders meet the challenges they face now and long term. Through our customized Tax Reimagined approach, KPMG solution architects help clients drive more effective tax function strategies and target operating models that can reduce costs, improve quality and unlock value.
Technology underpins everything we do and we’re excited about our new focus on bringing the wealth of solutions developed internationally, and at the member firm level, to one innovative platform across our organization. This integrated platform will bring the best of our technology investments to market in one place, allowing for a seamless and client-focused experience and tangible outcomes for companies around the world.
Our responsible tax initiative began 4 years ago with a simple proposition: that tax is the entry fee we pay for a civilized society. It was founded on the belief that a sustained and inclusive conversation is needed in order to negotiate the future of taxation in an increasingly globalized, digitalized world. The program has flourished, now with more than 1,300 voices and counting — including academics, NGOs, businesses, activists, government, media and more. The responsible tax effort has continued to expand its community base and advance its mission, including through events and online discussions.
As demand for multidisciplinary legal services grows amid changing business models, geopolitical shifts and increasing digitalization, legal services continue to be one of the fastest-growing areas of our organization. In-house lawyers face dramatic changes and our legal professionals are working alongside these professionals, bringing together our advisory and broader consulting expertise alongside our legal capabilities to help organizations tackle complex challenges in the legal space, especially those across borders.
Quality and integrity are at the heart of everything we do. We expect to spend up to USD5 billion over the next 5 years on technology, people and innovation to enhance our leadership in the digital transformation of professional services.
This investment will accelerate the digital transformation of the KPMG organization and the clients we serve, all of whom will benefit from the latest digital advancements across Audit, Tax and Advisory and the expertise of highly skilled KPMG professionals.
Our multi-year investment program remains strongly focused on delivering leading-edge technology that fosters innovative solutions for clients. Our ability to execute is significantly enhanced by a powerful ecosystem of alliances that combines KPMG’s deep industry expertise with data, service and technology organizations such as Alibaba Cloud, Amazon Web Services, Google Cloud, IBM, Microsoft, Oracle, ServiceNow and Workday. The latest addition to our alliances portfolio is Salesforce — a market leader in integrated customer relationship management (CRM) platforms.
Our drive to achieve game-changing new opportunities for clients will be defined by our dedication to trusted alliances, built on our unique capabilities and tools and the proven professionals behind them. Delivering exceptional quality in all that we do is at the top of KPMG’s Global Board agenda. Our focus on quality remains centered on accountability, monitoring, consistency and new technology investment across all of our operations and practices.
Legal services may not be offered to SEC registrant audit clients or where otherwise prohibited by law.
Throughout this document, “we”, “KPMG”, “us” and “our” refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
Throughout this document, references to “Firm”, “KPMG firm”, “member firm” and “KPMG member firm” refer to firms which are either: members of KPMG International as a matter of Swiss law; sublicensee firms of KPMG International; or entities that are owned, managed and controlled by an entity that is a member or a sublicensee. The overall governance structure of KPMG International is provided in the ‘Governance and leadership’ section of the KPMG International Transparency Report.