Our Transparency Report outlines how we drive audit quality, our systems of quality control, and how we are working to improve it. The 2021 KPMG Australia Transparency Report covers our financial year to 30 June 2021.
KPMG’s Transparency Report focuses on how we as a firm drive audit quality, our systems of quality control, and the initiatives we are continuously pursuing to improve it. We see audit quality as fundamental to maintaining public trust in the capital markets and the financial reports issued by audited organisations. We aim to lead the profession in audit quality.
When we talk about how we are striving to maintain and improve quality, it is not an abstract aspiration. Quality is fundamental to our purpose, and we constantly monitor and evaluate it.
We recognise that greater transparency is needed for the public to gain insight into audit services. This report outlines KPMG’s approach and commitment to audit quality, including actions taken to enhance audit quality during the year.
This report covers the activities of KPMG Australia for the financial year to 30 June 2021 and aligns with our refreshed Global KPMG Quality Framework. The new framework describes how our commitment to integrity and quality lies at the heart of the way we do things at KPMG.
| The work of modern auditors is diverse, stimulating, and important, and will only become more so into the future. |
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This year our people grappled with some of the most complex audits we have encountered, due to the extraordinary circumstance of some of our clients. Disruption to revenue, supply lines, rapid changes to business models, assumptions around asset values, increased uncertainty – all have played into the complexity.
Eileen Hoggett
National Managing Partner
Audit, Assurance & Risk Consulting
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We updated our audit methodology and embedded it in our new ‘smart’ global audit platform – KPMG Clara. A cornerstone of KPMG Clara is the new KPMG Clara workflow, a scalable system that will enhance global audit consistency. The new workflow will transform how we work in a range of ways.
Julian McPherson
National Partner in Charge
External Audit
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ASIC Audit Inspection Report
The ASIC Audit inspection process provides important perspectives and insights, helping us meet a shared goal of maintaining integrity in the capital markets through high quality audits. We value and respect this process as a key input to the way we continually monitor and improve audit quality.
The release of ASIC’s Audit Inspection reports today shows the 6 largest firms’ average improving from 24 percent in FY20, to 23 percent this year. For all firms inspected, results show a decline from 27 percent in FY20 to 32 percent this year.
For our own firm, ASIC reviewed a sample of 8 of listed company engagements, with many being severely impacted by COVID-19 restrictions. They were selected from more than 5000 audit opinions we sign annually. Our result shows a decline from 26 percent (for FY20), to 30 percent this year. However, the result is an improvement on pre-COVID (FY19) market conditions which shows the resilience of our partners and staff in maintaining audit quality in highly challenging conditions. None of the findings led to financial report restatements or required reissuance of the audit opinion.
For the first time, ASIC also reviewed how the firm establishes and maintains a culture focused on audit quality and how we ensure that we have right talent to undertake complex audits. Pleasingly, ASIC did not report any specific recommendations in this respect.
We wish to acknowledge the commitment of our teams to delivering audit quality during this time. While we expect there will be some volatility in results between inspection periods, we are confident our ongoing investments and focus on our people and audit technology will continue to drive audit quality improvement. Delivering high quality audits is our highest priority.
Please find following KPMG Australia’s ASIC Audit Inspection report in full.
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Julie Cleary
National Partner in Charge – Audit & Assurance, Enterprise
KPMG Australia
