Reporting principles

Purpose

This report provides an overview of KPMG N.V.’s business, strategy and performance. It explains how KPMG N.V., over time, creates value for its stakeholders both as an employer and as a provider of professional services. This report has been written for all KPMG N.V. stakeholders (including employees, the firm’s partners, clients, policymakers, regulators, suppliers and other business partners etc.).

Scope

This report covers KPMG N.V. and its subsidiaries. KPMG Meijburg & Co. is a separate KPMG member firm, and is therefore not included in the scope of this report, unless otherwise stated. Contents relate to KPMG N.V.’s 2020/2021 financial year, which runs from 1 October 2020 to 30 September 2021.

Content

Content is based on extensive internal reporting. Where external sources are used, this is indicated clearly in the text. Content focuses on issues material to KPMG N.V. and its stakeholders, based on the outcome of the firm’s annual materiality assessment. Our reporting process is overseen by a project team, led by our Corporate Affairs department. All content is reviewed by the firm’s Board of Management and Supervisory Board prior to publication. Except for the Financial Statements, figures used in the report are rounded to the nearest million or billion; in some cases, rounded figures are used to calculate percentages.

Financial information

Financial Statements are prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union, and with Section 2:362 (9) of the Dutch Civil Code. All financial performance data is presented in euros (EUR), the firm’s functional currency. For more information, see Note 2 to the consolidated Financial Statements (Basis of preparation).

Non-financial information

This report complies with the Core option of the Global Reporting Initiative (GRI). A GRI content index is available separately on this website via 'Downloads'. In compiling the report, KPMG N.V. also takes into account other non-financial reporting frameworks, including the Integrated Reporting Framework, published by the Value Reporting Foundation (VRF)^[1]. Throughout the report, all numbers per FTE are based on average FTE for the year as a whole, unless stated otherwise.

External assurance

External assurance for this report was provided by BDO Audit & Assurance B.V. See the independent auditor’s report. KPMG N.V. works closely with its external auditor to strengthen its reporting, and improve internal data collection and verification processes.

For this report, BDO Audit & Assurance B.V. provided reasonable assurance on the following indicators:

• • CO₂ emissions table (see table CO₂ emissions)

  • Total number of employees (FTEs) (see section Organisational structure)

  • Percentage of employee engagement (see section People)

  • Client satisfaction and Net Promoter Score (NPS) (see section Clients)

  • Quality Performance Reviews (QPRs) (see section Public trust)

  • Number of engagement quality controls reviews (EQCRs) (see section Performance of effective and efficient audits)

  • Community donations (see section Giving back)

  • Number of statutory audits conducted for (non) public interest entities (PIEs) (see section Organisational structure)

  • PIE entity listings (see Appendix - List of public interest entity clients)

  • Average absentee rate (average during the year) (see section Measuring employee engagement)

  • Following audit quality indicators: 1a, 1b, 2, 3, 4, 5, 6a, 7, 8, 11a, 11b, 12a and 12b. As explained in section Audit Quality Indicators. 

Please note that BDO Audit & Assurance B.V. provided assurance on the PDF version of this report.

Materiality assessment

Our materiality assessment is conducted each year to identify our material topics; The table below compares results from our 2019/2020 assessment with the current year:

Note on availability of resources and inputs

Our business relies on certain resources being available – these are detailed in our value creation model. Inevitably, changes to our business environment may affect the availability of these resources. We see the principal risks in this respect as follows:

• A shortage of key skills in certain areas leading to loss of business (including digital, data management, availability of trained accountants, staff turnover in our ‘Deals’ department etc.)

• Continued disruption to clients as a result of the Covid-19 pandemic and /or withdrawal of government financial support for certain sectors

• Continued risk of cyber attacks, with increased remote working and online communications with clients

• ‘Change risk’ with the emergence of new ways of working and increased digital communications with clients and other business partners.

For further information, see strategic risks & controls.

UN Sustainable Development Goals (SDGs)

Through our businesses, we contribute to the UN Sustainable Development Goals (SDGs); these contributions are shown in our value creation model. The table below maps our SDG contributions to our five strategic focus areas:

For more information on the SDGs, please see: https://sdgs.un.org/goals

Development and use of KPIs

As part of our reporting, we identified a number of key performance indicators (KPIs) for each of our five strategic focus areas; details of our performance against these KPIs are included elsewhere in this report.

• 1 The VRF was created in June 2021 with the merger of the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB).