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Regulatory and Peer Reviews
Regulatory and Peer Reviews
About external regulatory and peer reviews
About external regulatory and peer reviews
About external regulatory reviews
The Public Company Accounting Oversight Board (PCAOB) was established by the Sarbanes-Oxley Act of 2002 to oversee the audits of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports. To assist it in fulfilling its mission, the PCAOB conducts periodic inspections of registered public accounting firms.
KPMG has been subject to 15 periodic PCAOB inspections (excluding a limited inspection in 2003). You can find the 2013, 2014, 2015, 2016, and 2017 PCAOB inspection reports of the firm below.
About external peer reviews
KPMG’s system of audit quality control applicable to engagements that are not subject to PCAOB permanent inspection (nonpublic entity accounting and auditing practice) is subject to external peer review triennially.
PricewaterhouseCoopers LLP issued a report on its most recent external peer review of the firm in March 2018. In that report, KPMG received a peer review rating of pass with deficiency for the year ended March 31, 2017. Under the AICPA’s Peer Review Standards, firms may receive a rating of pass, pass with deficiency(ies), or fail.
The rating indicates that the firm’s system of quality control has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects, with the exception of a certain deficiency. The deficiency cited in the report is based on conduct that was identified by KPMG almost two years ago involving former KPMG personnel who used confidential inspection selections from the PCAOB or failed to report that the firm was in possession of the information. As the firm pointed out in its response, the risk that was identified in the report was addressed and fully remediated by KPMG in an appropriate, decisive, and timely manner. The AICPA’s acceptance letter notes that further remedial action is not required.
KPMG’s most recent peer review report, KPMG’s response, and the AICPA’s acceptance letter of our peer review are available below.
External regulatory reviews:
- In January 2019, the PCAOB released KPMG’s 2017 inspection report and KPMG’s 2016 inspection report. KPMG expects to submit its response to the nonpublic portion of these reports to the PCAOB by January 2020.
- In January 2019, the PCAOB republished KPMG’s 2015 and 2014 inspection reports to disclose certain quality control criticisms that the PCAOB determined the firm did not sufficiently remediate within 12 months of the original publication of those reports (the 12 months ended October 15, 2016, and November 9, 2017, respectively).
- The PCAOB released KPMG’s 2013 inspection report in October 2014. KPMG submitted its response to the nonpublic portion of this report to the PCAOB in September 2015. That response was deemed sufficient by the PCAOB.
- The PCAOB released KPMG’s 2012 inspection report in August 2013. KPMG submitted its response to the nonpublic portion of this report to the PCAOB in July 2014. That response was deemed sufficient by the PCAOB.
External peer reviews:
- KPMG’s most recent peer review report, KPMG's Letter of Response, and the AICPA’s acceptance letter of our peer review were issued in March 2018.