By John Farrell
Dedicated to trust. Committed to quality.
The auditing profession is now in its third century of change. We professionalized with the founding of the American Institute of Certified Public Accountants in 1887, matured in the 1900s, and underwent meaningful regulatory reforms with the creation of the Sarbanes-Oxley Act and the Public Company Accounting Oversight Board in the early 2000s.
Today, our transformation continues. Driven by technology and expectations from our stakeholders, we’re scaling innovation to drive audit quality. We are continuing to modernize our practice, reimagining how we conduct audits to provide a better experience for our people and our clients.
Our Audit Quality Report 2020 highlights how we provide quality, productive and insightful audits to support the capital markets, auditing thousands of companies each year.
We've made incredible progress accelerating in three key ways:
Using technology to drive consistency and efficiency. Technology enables a more data-driven, automated and transparent end-to-end audit. Vice Chair - Audit Scott Flynn and National Managing Partner, Audit Quality & Professional Practice Christian Peo discussed how our global smart audit platform, KPMG Clara, enhances efficiency and data integration and facilitates frictionless communications. KPMG Clara is now fully deployed at over 3,500 client sites, including about 75% of our public company audits.
Improving centralized services to map the future for smarter audits. We embrace a start-up mindset, investing in fundamental transformation and experimenting with new ideas that enhance audit quality. As National Managing Partner, Audit Operations Bill Tomazin wrote, our Center for Audit Solutions is an incubator for turning disruptions into standard practice and accelerating progress.
Leading the future of audit solutions by relying on our Culture and Value-driven investments in our people. Enhancing audit quality begins with fostering a people-first Culture where everyone plays an important role in sustainable and inclusive growth. Talent and Culture Leader, Audit Becky Sproul discussed Accelerate 2025, a five-year strategy to drive diversity and equity and develop an engaged workplace.
These initiatives are critical and underlying all of them is an open-innovation mindset driven by collaboration with our clients, our strategic alliances and our people.
For example, Ignition Centers experiences – where we bring clients, engagement teams and specialists together – jumpstart conversations on technology, data analytics and trust services and help us align to maximize the investments we are all making to improve operational excellence.
We are also working with our Strategic Alliance Partners to apply design thinking methodologies to explore data-driven technologies, emerging trends and the latest analytics that promote audit quality.
The foundation for successfully transforming our people must come first. The KPMG Innovation Factory – our online collaboration tool that facilitates innovation and idea management – has hosted more than 400 challenges, generating over 7,000 ideas from more than 9,000 users. It complements Audit Experience workshops, councils and champion networks to develop, test and scale ideas that continue to wow us.
Our commitment to excellence today determines our achievements tomorrow. Our open-innovation mindset drives audit quality – our fundamental promise to audit committees, investors, companies, communities and the stakeholders we serve. I look forward to working with my colleagues throughout our profession and continuing to collaborate and drive an open innovation mindset to further our transformation.