Quality control and risk management are the responsibility of all KPMG personnel, whether they are based in the UK or in one of our offshore locations. This responsibility includes the need to understand and adhere to policies and associated procedures in carrying out their day-to- day activities.
Our Chief Executive assumes ultimate responsibility for the UK’s system of quality control, in accordance with the principles in the revised ISQC1 issued by the FRC.
Operational responsibility for the system of quality control, risk management and compliance is delegated to the Chief Risk Officer, who is responsible for setting overall professional risk management and quality control policies and for monitoring compliance for KPMG in the UK.
The Chief Risk Officer has a direct reporting line to the Chief Executive and sits on the Executive Committee of KPMG in the UK, underlining the importance of the role.
The Chief Risk Officer is supported directly by a team of partners and professionals, including a Risk Management Partner in each of the Capabilities.
The Ethics Partner is supported by a core team to help ensure that we apply robust and consistent ethics and independence policies, processes and tools.
The Head of Audit, Head of Tax and Legal, Head of Deal Advisory and Head of Consulting are accountable to the Chief Executive for the quality of service delivered in their respective capability areas. While many of our quality control processes are cross-Capability and apply equally to tax and advisory work, the primary focus of the Transparency Report requirements relates to Audit. Our Audit Quality Framework (see here) provides more detail on the way it helps ensure the delivery of quality statutory audits.
In the case of the Audit practice, the Head of Audit Quality chairs the Audit Quality Council which met on a monthly basis during the year. These meetings, together with the monthly Emerging Issues Meeting chaired by the Chief Auditor, addressed external regulatory matters (including progress on AQR and QAD reviews and actions to address their findings), our internal quality reviews, emerging audit quality issues and current matters from the central quality teams.
The Audit Leadership Team Risk & Quality sub-committee meets monthly to consider risk within the audited entity portfolio and to ensure there are sufficient and appropriate controls and mitigations in place to support engagement leaders in performing a quality audit and in managing risk. Other focus areas of the sub-committee include monitoring of regulatory matters, assessment of the risk watchlist and consideration of other emerging risk areas.
Our UK Audit practice is also a key contributor to our global thinking, with representatives on all major global audit quality and development councils and teams. We use these forums to understand how other member firms have tackled similar issues, share our experiences, and facilitate common solutions.
At KPMG, audit quality is not just about reaching the right opinion, but how we reach that opinion. It is about the processes, thought and integrity behind the audit report.
We view the outcome of a quality audit as the delivery of an appropriate and independent opinion that complies with auditing standards. This means, above all, being independent, objective and compliant with relevant legal and professional requirements.