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All of the firm’s activities outside of the 

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professional services we deliver to clients are essentially

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considered business relationships when a third party is

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involved. Hosting or sponsoring a charitable event, and 

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posting to social media about an event that includes 

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external parties, engaging a third party as a subcontractor

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on client engagements, teaming arrangements with third 

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parties, and using third party software are some examples.

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KPMG is prohibited from having certain business 

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relationships with audit clients and their affiliates, 

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including relationships with our audit client’s directors,

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officers and beneficial owners with significant influence 

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over the audit clients, also referred to as “BOWSIs”. 

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Such relationships may create a mutuality of interest or may be

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seen as advocating for our client, affecting the firm’s 

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objectivity and impartiality or creating the appearance that

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independence is impaired. One exception is if the business

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relationship is as a consumer in the ordinary course of

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business, where the firm or professional is acting in the 

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capacity of a consumer and the relationship is not material

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to either party. That’s why it’s important that before

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entering into prospective business relationships, they are 

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reviewed for permissibility. When assessing for potential

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independence concerns, consideration needs to be given to

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both independence in fact and in appearance. Typically, when

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evaluating a business relationship, you will need to check

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Sentinel to see if the prospective relationship is with 

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a company or individual that is an audit client or one of its 

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affiliates or affiliated persons. To determine if the 

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relationship is permissible, submit a Sentinel business 

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relationship request, where required. Also, there are 

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dedicated groups within the firm to assist you in the 

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evaluation process for certain types of relationships. 

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Marketing and sponsorship activities involving third parties 

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are to be submitted via the Business Relationships Clearance 

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Tool and reviewed by the Brand Governance team. Brand 

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Governance escalates matters to the Independence Group as 

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needed. Different business relationships call for different 

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action in order to verify permissibility, so it’s best to

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review the US Risk Management Manual for guidance.

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A Business Relationships Toolkit found on the Independence 

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portal can also be referenced. The toolkit includes 

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templates, questionnaires and guidance documents.

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It’s important to remember that existing permitted business 

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relationships with unrestricted entities could become

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problematic in the event they become restricted, for example,

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through an acquisition by an audit client. It’s critical 

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that audit teams review the Sentinel services report when a 

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new entity is added to their client’s Sentinel family tree, 

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as well as when a private audit client is anticipating going 

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public to identify any business relationships for ongoing permissibility.

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Furthermore, you need to be mindful to 

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include standard independence clauses in all business

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relationship agreements. Using firm approved contract 

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templates ensures this. In instances where language is 

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modified, or a client would like to use their template,

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consultation with OGC is required and should occur prior to 

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contract execution.