WEBVTT

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Back in 2021, my team failed to meet all requirements of PCAOB Rule 3524

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for permissible tax services provided to our SEC Issuer audit client.

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Our team had described the tax consulting services and fee structure, in writing,

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and discussed the potential impact the proposed service may have on our independence

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with the Audit Committee delegate, obtaining their pre-approval and documenting the

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discussion with the delegate in KCw. Because we received delegate pre-approval,

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we then added the tax services to the audit results presentation that was provided to the

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full Audit Committee. Shortly after, we issued a Sentinel Approval Number to the tax team,

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they then executed the engagement letter and performed the services.

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After the fact, during the firm’s internal independence review process,

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it was discovered that we never discussed the potential effects of the service on

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KPMG’s independence with the full Audit Committee. Although, we did discuss

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the potential effects with the delegate and documented that discussion within KCw,

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since this discussion with the full Audit Committee did not take place,

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our documentation in KCw was incomplete.

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Because of this oversight, although we met requirements for part (a), PCAOB Rule 3524

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was violated because part (b) and (c) were not completely met.

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This situation made me realize the importance of meeting all elements of PCAOB Rule 3524.

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Even missing one part will result in a violation.

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To avoid making this mistake again, my team and I will refer to KCw for guidance.

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