WEBVTT

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As the lead audit engagement partner, I was

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contacted by my SEC audit client regarding a social media

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post, mentioning an event where personnel from both KPMG and

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their firm were speaking. My client wanted to understand if

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I was aware of the event and if it was permissible, given

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the firm’s audit relationship. I hadn’t been aware of the

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event and decided to reach out to the Independence Group to

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further discuss. The Independence Group reviewed all

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associated facts, which included a discussion with the KPMG

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personnel set to speak at the event where our audit client

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was also speaking. It was ultimately concluded that KPMG’s

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objectivity and impartiality were not impaired with respect

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to the audit client because KPMG and the client’s speaker

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were one of several speakers, which included a mix of

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non-audit and audit clients. The Independence Group pointed

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me to firm guidance, which stipulates two non-audit client

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speakers for every audit client speaker, to avoid the

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appearance that we have a business relationship with our

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audit client. Furthermore, the subject matter related to a

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general industry topic, it didn’t include discussions of our

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audit client relationship, a mutuality of interest with our

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audit client was not created, nor were we advocating for one

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another. However, it was determined that the KPMG personnel

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scheduled to speak at the event violated firm policy because

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they failed to submit the proposed speaking engagement to

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the Brand Governance team, via the Business Relationships

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Clearance Tool, or BRCT for review and approval. Although

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the event was deemed not to impair KPMG’s objectivity and

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impartiality with respect to the audit client, we did lose

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some trust from our client that we would communicate such

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arrangements prior to agreeing to them. They ultimately

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wanted to gain comfort around how KPMG would prevent

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something like this from happening again. I’ve now informed

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my team that speaking engagements should always be submitted

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to the Brand Governance team via the BRCT tool. In instances

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where the team is presented with other similar

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opportunities, we must be sure to understand the policies

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and guidance related to the type of relationship by

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referencing the evaluation of business relationship entities

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section  of the US Risk Management Manual. It’s how we

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do our part to protect our brand reputation and comply with

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firm policy.