2021 Inspection 
KPMG LLP
(Headquartered in New York, New York)
November 4, 2022
THIS IS A PUBLIC VERSION OF A PCAOB INSPECTION REPORT
PORTIONS OF THE COMPLETE REPORT ARE OMITTED FROM 
THIS DOCUMENT IN ORDER TO COMPLY WITH SECTIONS 104(g)
(2) AND 105(b)(5)(A) OF THE SARBANES-OXLEY ACT OF 2002
PCAOB RELEASE NO. 104-2022-222

KPMG LLP, PCAOB Release No. 104-2022-222, November 4, 2022  |  1
EXECUTIVE SUMMARY
Our 2021 inspection report on KPMG LLP provides information on our inspection to assess the firm’s 
compliance with Public Company Accounting Oversight Board (PCAOB) standards and rules and 
other applicable regulatory and professional requirements.  This executive summary offers a high-level 
overview of: 
	y
Part I.A of the report, which discusses deficiencies (“Part I.A deficiencies”) in certain issuer audits 
that were of such significance that we believe the firm, at the time it issued its audit report(s), had 
not obtained sufficient appropriate audit evidence to support its opinion(s) on the issuer’s financial 
statements and/or internal control over financial reporting (ICFR); and 
	y
Part I.B of the report, which discusses deficiencies that do not relate directly to the sufficiency or 
appropriateness of evidence the firm obtained to support its opinion(s) but nevertheless relate to 
instances of non-compliance with PCAOB standards or rules.  
If we include a deficiency in this report — other than those deficiencies for audits with incorrect opinions 
on the financial statements and/or ICFR — it does not necessarily mean that the issuer’s financial 
statements are materially misstated or that undisclosed material weaknesses in ICFR exist.  If we include 
a deficiency in Part I.A or Part I.B of this report, it does not necessarily mean that the firm has not 
addressed the deficiency.    
Overview of the 2021 Deficiencies Included in Part I 
Fourteen of the 54 audits we reviewed in 2021 are included in Part I.A of this report due to the 
significance of the deficiencies identified. The identified deficiencies primarily related to the firm’s 
testing of controls over and/or substantive testing of revenue and related accounts, allowance for credit 
losses, inventory, and going concern. 
2021
40
14
Audits without Part I.A deﬁciencies
Audits with Part I.A deﬁciencies
Deﬁciencies in both ﬁnancial statement
and ICFR audits
Deﬁciencies in the ﬁnancial statement
audit only
Deﬁciencies in the ICFR audit only
8
4
2
2021

KPMG LLP, PCAOB Release No. 104-2022-222, November 4, 2022  |  2
The most common Part I.A deficiencies in 2021 related to testing the design or operating effectiveness of 
controls selected for testing, testing controls over the accuracy and completeness of data or reports used 
in the operation of controls, testing data or reports used in substantive testing, and in some cases the 
resulting overreliance on controls when performing substantive testing.  
Other deficiencies identified during the 2021 inspection that do not relate directly to the sufficiency 
or appropriateness of evidence the firm obtained to support its opinion(s), which appear in Part I.B, 
related to management representation letters, retention of audit documentation, audit committee 
communications, and critical audit matters.

KPMG LLP, PCAOB Release No. 104-2022-222, November 4, 2022  |  3
CONTENTS
2021 Inspection	
4
Overview of the 2021 Inspection and Historical 
Data by Inspection Year	
6
Part I: Inspection Observations	
16
Part I.A: Audits with Unsupported Opinions	
16
Part I.B: Other Instances of Non-Compliance 
with PCAOB Standards or Rules	
25
Part II: Observations Related to Quality Control	
26
Appendix A: Firm’s Response to the Draft 
Inspection Report	
A-1

KPMG LLP, PCAOB Release No. 104-2022-222, November 4, 2022  |  4
2021 INSPECTION
In the 2021 inspection of KPMG LLP, the PCAOB assessed the firm’s compliance with laws, rules, and 
professional standards applicable to the audits of public companies.  
We selected for review 54 audits of issuers with fiscal years generally ending in 2020. For each issuer audit 
selected, we reviewed a portion of the audit. We also evaluated elements of the firm’s system of quality 
control. 
We also selected for review two reviews of interim financial information ("interim reviews"). Our reviews 
were performed to gain a timely understanding of emerging financial reporting and auditing risks 
associated with issuers that were formed by mergers between non-public operating companies and 
special purpose acquisition companies (SPACs). We did not identify any instances of non-compliance with 
PCAOB standards related to the interim reviews that we reviewed.  
What’s Included in this Inspection Report
This report includes the following sections:   
	y
Overview of the 2021 Inspection and Historical Data by Inspection Year: Information on our 
inspection, historical data, and common deficiencies.
	y
Part I – Inspection Observations:
	
o Part I.A: Deficiencies that were of such significance that we believe the firm, at the time it issued its 
audit report(s), had not obtained sufficient appropriate audit evidence to support its opinion(s) on 
the issuer’s financial statements and/or ICFR. 
	
o Part I.B: Deficiencies that do not relate directly to the sufficiency or appropriateness of evidence the 
firm obtained to support its opinion(s) but nevertheless relate to instances of non-compliance with 
PCAOB standards or rules. 
	y
Part II – Observations Related to Quality Control: Criticisms of, or potential defects in, the firm’s 
system of quality control. Section 104(g)(2) of the Sarbanes-Oxley Act (“Act”) restricts us from publicly 
disclosing Part II deficiencies unless the firm does not address the criticisms or potential defects to the 
Board’s satisfaction no later than 12 months after the issuance of this report.
	y
Appendix A – Firm’s Response to the Draft Inspection Report: The firm’s response to a draft of this 
report, excluding any portion granted confidential treatment.
2021 Inspection Approach 
In selecting issuer audits for review, we use both risk-based and random methods of selection. We make 
the majority of our selections based on (1) our internal evaluation of audits we believe have a heightened 
risk of material misstatement, including those with challenging audit areas, and (2) other risk-based 
characteristics, including issuer and firm considerations. We also select audits randomly to provide an 
element of unpredictability.  
When we review an audit, we do not review every aspect of the audit. Rather, we generally focus our 
attention on audit areas we believe to be of greater complexity, areas of greater significance or with a 
heightened risk of material misstatement to the issuer’s financial statements, and areas of recurring 
deficiencies. We may also select some audit areas for review in a manner designed to incorporate 
unpredictability.

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Our selection of audits for review does not constitute a representative sample of the firm’s total 
population of issuer audits. Additionally, our inspection findings are specific to the particular portions of 
the issuer audits reviewed. They are not an assessment of all of the firm’s audit work nor of all of the audit 
procedures performed for the audits reviewed. 
Our target team performs inspection procedures in areas of current audit risk and emerging topics and 
focuses its reviews primarily on evaluating the firm’s procedures related to that risk or topic. In 2021, our 
target team focused primarily on audit areas affected by COVID-19, such as fraud and going concern, and 
on interim reviews of issuers that were formed by mergers between non-public operating companies 
and SPACs.1 
For the interim reviews, similar to our approach for reviewing audits, our target team did not review every 
aspect of the interim review. Rather, its review procedures focused on a portion of the firm’s procedures. 
View the details on the scope of our inspections and our inspections procedures. 
1	 Refer to Observations From the Target Team’s 2021 Inspections for observations from the target team reviews.

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OVERVIEW OF THE 2021 INSPECTION AND 
HISTORICAL DATA BY INSPECTION YEAR
The following information provides an overview of our 2021 inspection as well as data from the previous 
two inspections. We use a combination of risk-based and random methods to select audits for review and 
to identify areas on which we focus our review. Because our inspection process evolves over time, it can, 
and often does, focus on a different mix of audits and audit areas from year to year and firm to firm. As a 
result of this variation, we caution that our inspection results are not necessarily comparable over time or 
among firms.   
Audits Selected for Review
2	 For further information on the target team’s activities in 2020 and 2019, refer to those inspection reports.   
2021
2020
2019
Total audits reviewed
Total audits reviewed
54
53
58
Selection method
Risk-based selections
25
37
39
Random selections
25
13
13
Target team selections2
4
3
6
   Total audits reviewed
54
53
58
Principal auditor
Audits in which the firm was the principal auditor
54
52
55
Audits in which the firm was not the principal 
auditor
0
1
3
   Total audits reviewed
54
53
58
Audit type
Integrated audits of financial statements and ICFR 
45
47
52
Financial statement audits only
9
6
6
   Total audits reviewed
54
53
58

KPMG LLP, PCAOB Release No. 104-2022-222, November 4, 2022  |  7
2021
40
14
Audits with Part I.A deﬁciencies
Audits without Part I.A deﬁciencies
41
17
2020
39
14
2019
If we include a deficiency in Part I.A of our report, it does not necessarily mean that the firm has not 
addressed the deficiency. In many cases, the firm has performed remedial actions after the deficiency 
was identified. Depending on the circumstances, remedial actions may include performing additional 
audit procedures, informing management of the issuer of the need for changes to the financial 
statements or reporting on ICFR, or taking steps to prevent reliance on prior audit reports.  
Our inspection normally includes a review, on a sample basis, of the adequacy of a firm’s remedial 
actions, either with respect to previously identified deficiencies or deficiencies identified during the 
current inspection. If a firm does not take appropriate actions to address deficiencies, we may criticize its 
system of quality control or pursue a disciplinary action. 
If we include a deficiency in our report — other than those deficiencies for audits with incorrect opinions 
on the financial statements and/or ICFR — it does not necessarily mean that the issuer’s financial 
statements are materially misstated or that undisclosed material weaknesses in ICFR exist. It is often not 
possible for us to reach a conclusion on those points based on our inspection procedures and related 
findings because, for example, we have only the information that the auditor retained and the issuer’s 
public disclosures. We do not have direct access to the issuer’s management, underlying books and 
records, and other information.
Part I.A Deficiencies in Audits Reviewed
In 2021 and 2020, nine of the 14 audits appearing in Part I.A were selected for review using risk-based 
criteria. In 2019, 14 of the 17 audits appearing in Part I.A were selected for review using risk-based criteria.

KPMG LLP, PCAOB Release No. 104-2022-222, November 4, 2022  |  8
Audits Affected by the Deficiencies Identified in Part I.A 
Deﬁciencies in the ICFR
audit only
Deﬁciencies in the ﬁnancial 
statement audit only
Deﬁciencies in both ﬁnancial
statement and ICFR audits
8
4
2
2021
16
1
9
4
1
2020
2019
In connection with our 2019 inspection procedures for one audit, the issuer restated its financial 
statements and the firm revised and reissued its report on the financial statements. In connection with 
our 2019 inspection procedures for this audit and for one additional audit, the issuers revised their reports 
on ICFR and the firm revised its opinions on the effectiveness of the issuers’ ICFR to express adverse 
opinions and reissued its reports. In addition, in connection with our 2019 inspection procedures for one 
audit, the issuer disclosed in a subsequent filing that a material weakness existed as of the date covered 
by the firm’s audit that was subject to our review.

KPMG LLP, PCAOB Release No. 104-2022-222, November 4, 2022  |  9
The following tables and graphs summarize inspection-related information, by inspection year, for 2021 
and the previous two inspections. We caution against making any comparison of the data provided 
without reading the descriptions of the underlying deficiencies in each respective inspection report. 
Most Frequently Identified Part I.A Deficiencies
Deficiencies in audits of financial 
statements
Audits with Part I.A deficiencies
2021
2020
2019
Did not obtain sufficient evidence as a 
result of overreliance on controls (due to 
deficiencies in testing controls)
6
8
8
Did not perform sufficient testing of data 
or reports used in the firm's substantive 
testing
5
3
2
Did not sufficiently evaluate significant 
assumptions that the issuer used in 
developing an estimate
2
2
6
Deficiencies in ICFR audits 
Audits with Part I.A deficiencies 
2021
2020
2019
Did not perform sufficient testing of the 
design and/or operating effectiveness of 
controls selected for testing
9
9
10
Did not identify and/or sufficiently 
test controls over the accuracy and 
completeness of data or reports that the 
issuer used in the operation of controls
6
5
3
Did not identify and test any controls that 
addressed the risks related to a significant 
account or relevant assertion
5
5 
12

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Audit Areas with Frequent Part I.A Deficiencies
This table reflects the audit areas with the most frequently identified Part I.A deficiencies in each 
inspection year with the corresponding results for the other two years presented. 
Audit Areas Most Frequently Reviewed
This table reflects the five audit areas we have selected most frequently for review in each inspection year 
(and the related Part I.A deficiencies). For the issuer audits selected for review, we selected these areas 
because they were generally significant to the issuer’s financial statements, may have included complex 
issues for auditors, and/or involved complex judgments in (1) estimating and auditing the reported value 
of related accounts and disclosures and (2) implementing and auditing the related controls. 
2021
2020
2019
Audit area
Audits 
reviewed
Audits with 
Part I.A 
deficiencies
Audit area
Audits 
reviewed
Audits with 
Part I.A 
deficiencies
Audit area
Audits 
reviewed
Audits with 
Part I.A 
deficiencies
Revenue 
and related 
accounts
32
6
Revenue 
and related 
accounts
36
5
Revenue 
and related 
accounts
40
9
Long-lived 
assets
15
1
Business 
combinations
13
1
Inventory
14
2
Debt
12
0
Investment 
securities
12
4
Investment 
securities
12
2
Goodwill and 
intangible 
assets
11
1
Inventory
12
1
Business 
combinations
11
3
Cash 
and cash 
equivalents
11
0
Long-lived 
assets
12
0
Allowance 
for loan 
losses
11
2
2021
2020
2019
Audit area
Audits with 
Part I.A 
deficiencies
Audits 
reviewed
Audits with 
Part I.A 
deficiencies
Audits 
reviewed
Audits with 
Part I.A 
deficiencies
Audits 
reviewed
Revenue and 
related accounts
6
32
5
36
9
40
Allowance for 
credit losses/
Allowance for 
loan losses
3
9
2
11
2
11
Inventory
2
9
1
12
2
14
Going concern
2
6
0
6
0
0
Investment 
securities
1
8
4
12
2
12
Business 
combinations
0
8
1
13
3
11

KPMG LLP, PCAOB Release No. 104-2022-222, November 4, 2022  |  11
Revenue and related accounts: The deficiencies in 2021, 2020, and 2019 related to substantive testing of, 
and testing controls over, revenue.
Allowance for credit losses/Allowance for loan losses: The deficiencies in 2021 primarily related to 
testing controls over the allowance for credit losses. The deficiencies in 2020 related to testing controls 
over the allowance for loan losses. The deficiencies in 2019 related to substantive testing of, and testing 
controls over, the allowance for loan losses. 
Inventory: The deficiencies in 2021 primarily related to testing controls over the existence of inventory. 
The deficiencies in 2020 and 2019 related to testing controls over the existence of inventory and the 
resulting overreliance on controls when performing substantive testing.
Going concern: The deficiencies in 2021 primarily related to substantive testing of the evaluation of an 
issuer’s ability to continue as a going concern.
Investment securities: The deficiency in 2021 related to testing a control over the evaluation of 
investment securities for possible impairment. The deficiencies in 2020 and 2019 related to substantive 
testing of, and testing controls over, investment securities.
Business combinations: The deficiency in 2020 related to evaluating the reasonableness of assumptions 
used by the issuer to determine the fair value of an asset acquired. The deficiencies in 2019 primarily 
related to substantive testing of, and testing controls over, acquired loans.

KPMG LLP, PCAOB Release No. 104-2022-222, November 4, 2022  |  12
Auditing Standards Associated with Identified Part I.A 
Deficiencies
The following lists the auditing standards referenced in Part I.A of the 2021 and the previous two 
inspection reports, and the number of times that the standard is cited in Part I.A.  
PCAOB Auditing Standards
2021
2020
2019
AS 1105, Audit Evidence
11
3
3
AS 2101, Audit Planning
0
0
1
AS 2201, An Audit of Internal Control Over Financial 
Reporting That Is Integrated with An Audit of Financial 
Statements
29
32
38
AS 2301, The Auditor’s Responses to the Risks of Material 
Misstatement
6
10
15
AS 2315, Audit Sampling
5
7
9
AS 2401, Consideration of Fraud in a Financial Statement 
Audit
0
0
1
AS 2415, Consideration of an Entity’s Ability to Continue as a 
Going Concern
1
0
0
AS 2501, Auditing Accounting Estimates, Including Fair 
Value Measurements (effective for fiscal years ending on or 
after December 15, 2020)
2
-
-
AS 2501, Auditing Accounting Estimates (effective for fiscal 
years ending before December 15, 2020)
1
0
2
AS 2502, Auditing Fair Value Measurements and Disclosures 
(effective for fiscal years ending before December 15, 2020)
0
4
5
AS 2503, Auditing Derivative Instruments, Hedging 
Activities, and Investments in Securities (effective for fiscal 
years ending before December 15, 2020)
0
1
0
AS 2510, Auditing Inventories
1
0
1
AS 2601, Consideration of an Entity’s Use of a Service 
Organization 
1
0
0
AS 2810, Evaluating Audit Results
1
0
1

KPMG LLP, PCAOB Release No. 104-2022-222, November 4, 2022  |  13
Inspection Results by Issuer 
Industry Sector 
Audits without Part I.A deﬁciencies
Audits with Part I.A deﬁciencies
Real Estate
Beneﬁt Plans
Health Care
Materials
Industrials
Information
Technology
Energy
Financials
Consumer
Staples
Consumer
Discretionary
Communication
Services
Utilities
8
12
10
6
2019
0
4
14
2
2
1
1
1
9
7
4
2
1
3
4
3
5
3
2
2
3
5
Real Estate
Beneﬁt Plans
Health Care
Materials
Industrials
Information
Technology
Energy
Financials
Consumer
Staples
Consumer
Discretionary
Communication
Services
Utilities
8
12
10
6
2020
0
4
14
2
2
1
2
9
6
4
4
1
3
6
2
2
1
3
7
Real Estate
Beneﬁt Plans
Health Care
Materials
Industrials
Information
Technology
Energy
Financials
Consumer
Staples
Consumer
Discretionary
Communication
Services
Utilities
8
12
10
6
2021
0
4
14
2
1
3
1
1
1
3
4
3
2
9
3
7
5
2
4
5
The majority of industry sector data is based on 
Global Industry Classification Standard (GICS) data 
obtained from Standard & Poor’s (S&P). In instances 
where GICS data for an issuer is not available from 
S&P, classifications are assigned based upon North 
American Industry Classification System data.

KPMG LLP, PCAOB Release No. 104-2022-222, November 4, 2022  |  14
Inspection Results by Issuer Revenue Range
Less than
$100 million
$100 – $500
million
Greater than
$500 million
– $1 billion
Greater than
$1 – $2.5
billion
Greater than
$2.5 – $5
billion
Greater than
$5 – $10
billion
Greater than
$10 – $50
billion
Greater than
$50 billion
Less than
$100 million
$100 – $500
million
Greater than
$500 million
– $1 billion
Greater than
$1 – $2.5
billion
Greater than
$2.5 – $5
billion
Greater than
$5 – $10
billion
Greater than
$10 – $50
billion
Greater than
$50 billion
Audits without Part I.A deﬁciencies
Audits with Part I.A deﬁciencies
2019
0
2
4
6
10
8
12
14
5
5
2
1
7
5
6
4
4
2
5
2
8
2
0
2
4
6
10
8
12
16
14
18
2021
8
2
4
3
11
7
5
6
3
1
1
Less than
$100 million
$100 – $500
million
Greater than
$500 million
– $1 billion
Greater than
$1 – $2.5
billion
Greater than
$2.5 – $5
billion
Greater than
$5 – $10
billion
Greater than
$10 – $50
billion
Greater than
$50 billion
2020
0
2
4
6
10
8
12
14
3
1
8
1
1
4
1
5
4
8
4
4
1
6
1
1
3

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Classification of Audits with Part I.A Deficiencies
Within Part I.A of this report, we classify each issuer audit in one of the categories discussed below based 
on the Part I.A deficiency or deficiencies identified in our review. 
The purpose of this classification system is to group and present issuer audits by the number of Part I.A 
deficiencies we identified within the audit as well as to highlight audits with an incorrect opinion on the 
financial statements and/or ICFR.
Audits with an Incorrect Opinion on the Financial Statements and/or ICFR
This classification includes instances where a deficiency was identified in connection with our inspection 
and, as a result, an issuer’s financial statements were determined to be materially misstated, and the 
issuer restated its financial statements. It also includes instances where a deficiency was identified in 
connection with our inspection and, as a result, an issuer’s ICFR was determined to be ineffective, or there 
were additional material weaknesses that the firm did not identify, and the firm withdrew its opinion, or 
revised its report, on ICFR. This classification does not include instances where, unrelated to our review, 
an issuer restated its financial statements and/or an issuer’s ICFR was determined to be ineffective. We 
include any deficiencies identified in connection with our reviews of these audits in the audits with 
multiple deficiencies or audits with a single deficiency classification below.
Audits with Multiple Deficiencies
This classification includes instances where multiple deficiencies were identified that related to a 
combination of one or more financial statement accounts, disclosures, and/or important controls in an 
ICFR audit.
Audits with a Single Deficiency
This classification includes instances where a single deficiency was identified that related to a financial 
statement account or disclosure or to an important control in an ICFR audit.
Number of Audits in Each Category
2021
2020
2019
Audits with an incorrect opinion
on the ﬁnancial statements
and/or ICFR
Audits with multiple deﬁciencies
Audits with a single deﬁciency
Audits without Part I.A deﬁciencies
13
1
13
12
3
1
2
41
40
39
30
10
20
40
0
50

KPMG LLP, PCAOB Release No. 104-2022-222, November 4, 2022  |  16
PART I: INSPECTION OBSERVATIONS
Part I.A of our report discusses deficiencies that were of such significance that we believe the firm, at the 
time it issued its audit report(s), had not obtained sufficient appropriate audit evidence to support its 
opinion(s) on the issuer’s financial statements and/or ICFR. 
Part I.B discusses deficiencies that do not relate directly to the sufficiency or appropriateness of evidence 
the firm obtained to support its opinion(s) but nevertheless relate to instances of non-compliance with 
PCAOB standards or rules. 
Consistent with the Act, it is the Board’s assessment that nothing in Part I of this report deals with a 
criticism of, or potential defect in, the firm’s quality control system. We discuss any such criticisms or 
potential defects in Part II. Further, you should not infer from any Part I deficiency, or combination of 
deficiencies, that we identified a quality control finding in Part II.
PART I.A: AUDITS WITH UNSUPPORTED OPINIONS
This section of our report discusses the deficiencies identified, by specific issuer audit reviewed, in the 
audit work supporting the firm’s opinion(s) on the issuer’s financial statements and/or ICFR. 
We identify each issuer by a letter (e.g., Issuer A) and industry sector. Each deficiency could relate to 
several auditing standards, but we reference the PCAOB standard(s) that most directly relates to the 
requirement with which the firm did not comply. 
We present issuer audits below within their respective deficiency classifications (as discussed previously). 
Within the classifications, we generally present the audits based on our assessment as to the relative 
significance of the identified deficiencies, taking into account the significance of the financial statement 
accounts and/or disclosures affected, and/or the nature or extent of the deficiencies.   
Audits with an Incorrect Opinion on the Financial Statements 
and/or ICFR
None 
Audits with Multiple Deficiencies 
Issuer A – Consumer Discretionary
Type of audit and related areas affected
In our review, we identified deficiencies in the financial statement and ICFR audits related to Inventory, 
Revenue, and Accruals and Other Liabilities.
Description of the deficiencies identified
With respect to Inventory:
The issuer accounted for certain of its inventory under the first-in, first-out (FIFO) method of accounting. 
The firm selected for testing an automated control over the issuer’s inventory management system. The 
firm did not evaluate and test whether this automated control addressed the risk that the inventory 
management system was appropriately configured to apply the FIFO method of accounting to the 
inventory. (AS 2201.42 and .44)

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The issuer performed cycle counts of inventory at certain of the issuer’s locations. The firm selected for 
testing controls that consisted of the issuer’s cycle-count procedures and reviews of reports to monitor 
the frequency and accuracy of the counts. The firm did not identify and test any controls over the 
accuracy and/or completeness of the system-generated reports the issuer used in the operation of its 
cycle-count monitoring controls. (AS 2201.39)
Due to the deficiency discussed above, the firm did not obtain sufficient appropriate audit evidence that 
the cycle-count procedures the issuer used for this inventory were sufficiently reliable to produce results 
substantially the same as those that would have been obtained by a count of all items each year. (AS 
2510.11)
The firm selected for testing a control that consisted of the issuer’s review of the reserve for excess and 
obsolete inventory. The firm did not identify and test any controls over the accuracy of the system-
generated report the issuer used in the operation of this control. (AS 2201.39)
The firm did not perform substantive procedures to test, or in the alternative, identify and test any 
controls over (as discussed above), the accuracy of the system-generated report that the firm used in its 
substantive testing of the reserve for excess and obsolete inventory. (AS 1105.10)
With respect to Revenue:
For certain revenue, the issuer provided qualified customers with volume rebates that it estimated 
based on historical sales data. The firm selected for testing a control that consisted of the recalculation, 
and reconciliation to the general ledger, of these rebates. The firm did not identify and test any controls 
over the accuracy and completeness of the historical sales data used in the operation of this control. (AS 
2201.39)
The firm did not perform substantive procedures to test, or in the alternative, identify and test any 
controls over (as discussed above), the accuracy and completeness of the historical sales data that the 
firm used in its substantive testing of the volume rebates. (AS 1105.10)
The sample size the firm used in certain of its substantive procedures to test the volume rebates was too 
small to provide sufficient appropriate audit evidence because these procedures were designed based 
on a level of control reliance that was not supported due to the deficiencies in the firm’s control testing 
discussed above. (AS 2301.16, .18, and .37; AS 2315.19, .23, and .23A)
With respect to Accruals and Other Liabilities:
The issuer used a service organization to manage its deferred compensation plan. The firm selected 
for testing a control that consisted of the issuer’s review of the service auditor’s report on the operating 
effectiveness of the service organization’s controls. The following deficiencies were identified:
	y
The firm did not evaluate whether the issuer had implemented the appropriate complementary user 
entity controls to meet the control objectives stated in the service auditor’s report. (AS 2201.39 and 
.B22) 
	y
The firm did not evaluate the specific review procedures that the control owner performed to 
determine whether the sub-service organizations discussed in the service auditor’s report were 
relevant to the issuer. (AS 2201.42 and .44) 
	y
The firm did not evaluate which, if any, of the subservice organizations discussed in the service 
auditor’s report were relevant to the issuer. (AS 2601.07 - .16)

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Issuer B – Energy
Type of audit and related areas affected
In our review, we identified deficiencies in the financial statement audit related to Asset Retirement 
Obligations (ARO) and Oil and Gas Properties.
Description of the deficiencies identified
With respect to ARO:
The firm did not perform any substantive procedures to test the issuer’s ARO. (AS 2301.08)
With respect to Oil and Gas Properties:
The issuer estimated certain of its oil and gas reserves using information provided by the issuer’s 
specialists. The following deficiencies were identified:
	y
The firm did not evaluate (1) the knowledge, skill, and ability of one company specialist and (2) the 
relationship of the issuer to this specialist. (AS 1105.A3 and A4)
	y
The firm did not perform any procedures to test the accuracy and completeness of certain issuer-
prepared data used by another company specialist. (AS 1105.A8a) In addition, the firm did not perform 
any procedures to evaluate the relevance and reliability of certain data obtained from external sources 
and used by this specialist. (AS 1105.A8a) 
The issuer developed undiscounted cash flows for its impairment analysis of unproved properties using 
various assumptions. The firm did not evaluate the reasonableness of certain significant assumptions 
the issuer used to develop these cash flows, including the issuer’s intent and ability to execute certain of 
its plans. (AS 2501.16 and .17) In addition, the firm did not test the accuracy and completeness of certain 
reports the issuer used to develop these cash flows. (AS 1105.10)
The firm did not evaluate the reasonableness of certain significant assumptions the issuer used to 
develop undiscounted cash flows for its impairment analyses and calculation of depreciation, depletion, 
and amortization (DDA) expenses for certain proved properties. (AS 2501.16)
The firm did not evaluate whether another significant assumption the issuer used to calculate DDA was 
in conformity with FASB ASC Topic 932, Oil and Gas. (AS 2810.30 and .31)
Issuer C – Industrials
Type of audit and related areas affected
In our review, we identified deficiencies in the financial statement and ICFR audits related to Revenue 
and Accounts Receivable.
Description of the deficiencies identified
The issuer recognized various types of revenue from one of its segments. The following deficiencies were 
identified:
	y
For one type of revenue, the firm did not identify and test any controls that addressed whether the 
performance obligation was satisfied before revenue was recognized. (AS 2201.39)
	y
The firm selected for testing a control over the annual adjustments to the contract prices that the 
issuer entered into its revenue system and used to calculate and recognize revenue. The firm did not 
identify and test any controls over the completeness of certain data that were used in the performance

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of this control. (AS 2201.39) In addition, one aspect of this control consisted of the control owner’s 
review of a sample of these pricing adjustments. The firm did not evaluate whether the control was 
designed to satisfy the issuer’s control objective given the high rate of discrepancies the control owner 
identified in the sample reviewed. (AS 2201.42)
	y
The firm selected for testing an automated control over the calculation of revenue for this segment by 
the issuer’s billing system. The firm did not test the operating effectiveness of this control for three of 
the issuer’s types of revenue related to this segment. (AS 2201.44)
	y
The sample sizes the firm used in certain of its substantive procedures to test revenue and accounts 
receivable for this segment were too small to provide sufficient appropriate audit evidence because 
these procedures were designed based on a level of control reliance that was not supported due to 
the deficiencies in the firm’s control testing discussed above. (AS 2301.16, .18, and .37; AS 2315.19, .23, and 
.23A)
	y
For the type of revenue subject to the first deficiency discussed above, the firm’s substantive 
procedures to test revenue and related accounts receivable consisted of performing tests of details. 
The firm used certain system-generated data to provide evidence related to revenue recognition in 
its substantive testing. The firm did not perform substantive procedures to test, or in the alternative, 
identify and test any controls over (as discussed in the first deficiency above), the accuracy of the 
system-generated data that the firm used in its substantive testing. (AS 1105.10)
Issuer D – Financials
Type of audit and related areas affected
In our review, we identified deficiencies in the ICFR audit related to the Allowance for Credit Losses 
(ACL) and Goodwill.
Description of the deficiencies identified
With respect to the ACL:
For certain loans, the quantitative and qualitative components of the issuer’s ACL were calculated 
using models that relied upon certain current and historical loan data and forecasted macroeconomic 
scenarios. The following deficiencies were identified:
	y
The issuer compiled the forecasted macroeconomic scenarios it developed into a spreadsheet and 
distributed the spreadsheet to various users who had access to make changes to the data in the 
spreadsheet. The firm did not identify and test any controls over the accuracy and completeness of 
any changes made by users to the data in the spreadsheet. (AS 2201.39)
	y
The firm identified and tested controls that consisted of the control owner’s recalculation of the 
qualitative ACL for certain loans. The firm did not identify and test any controls over the accuracy and 
completeness of the forecasted macroeconomic scenarios used in the control owner’s recalculation. 
(AS 2201.39)
	y
The firm identified and tested a control that consisted of the issuer’s review of its ability to forecast 
the quantitative component of the issuer’s ACL. The firm did not test the aspect of this control 
that addressed the accuracy and completeness of certain historical loan data and macroeconomic 
scenarios used in the operation of this control. (AS 2201.42 and .44)

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With respect to Goodwill:
The firm selected for testing controls that consisted of reviews of significant assumptions underlying 
the cash-flow forecasts used in the issuer’s annual goodwill impairment assessment. The firm did not 
evaluate the specific review procedures that the control owners performed to assess the reasonableness 
of these assumptions. (AS 2201.42 and .44)
Issuer E – Industrials
Type of audit and related areas affected
In our review, we identified deficiencies in the financial statement and ICFR audits related to Revenue 
and Inventory.
Description of the deficiencies identified
With respect to Revenue:
The issuer entered into contracts with certain customers that required revenue to be recognized over 
time based on costs incurred to date relative to total estimated costs to complete these contracts. The 
following deficiencies were identified: 
	y
The firm selected for testing a control that included a preliminary review of certain profit margin 
metrics by contract to identify items for further investigation. The firm did not identify and test any 
controls over the completeness of certain data underlying these performance metrics. (AS 2201.39) 
	y
The firm’s approach for substantively testing this revenue was to review and test management’s 
process. The firm did not sufficiently evaluate the reasonableness of certain significant assumptions 
that management used as inputs into its revenue recognition model because its procedures were 
limited to inquiring of management and performing a retrospective review to determine whether 
prior projections were consistent with actual results. (AS 2501.09, .10, and .11)3 
With respect to Inventory:
The issuer performed cycle counts of inventory at certain of the issuer’s locations. The firm selected for 
testing controls that consisted of the issuer’s cycle-count procedures and reviews of reports to monitor 
the accuracy of the counts. The firm did not evaluate the procedures the control owner performed to 
assess the accuracy and completeness of certain data used in the operation of the issuer’s cycle-count 
monitoring controls. (AS 2201.42 and 44)
Issuer F – Consumer Discretionary
Type of audit and related areas affected
In our review, we identified deficiencies in the financial statement and ICFR audits related to Revenue 
and Expenses.
Description of the deficiencies identified
The issuer is a franchisor, and its system automatically calculates and records certain types of revenue 
and one type of expense based on the unique scenarios contained in franchisee-specific contracts and 
transactional data reported by its franchisees. 
3	 This citation refers to AS 2501, Auditing Accounting Estimates, which was in effect for this audit. This standard was 
replaced by AS 2501, Auditing Accounting Estimates, Including Fair Value Measurements, which became effective for 
audits of financial statements for fiscal years ending on or after December 15, 2020.

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The firm selected for testing automated controls over the calculation of these types of revenue and this 
expense. The firm did not sufficiently test the configuration of these automated controls because it 
limited its testing to only certain of the contractual scenarios, without addressing the risks of material 
misstatement associated with the untested scenarios. (AS 2201.42 and .44)
The firm did not identify and test any controls over the transactional data that the franchisees reported 
to the issuer and that were significant inputs used to calculate these types of revenue and this expense. 
(AS 2201.39) 
The firm used transactional data that the franchisees reported to the issuer in the testing of these types 
of revenue and this expense. The firm did not evaluate the relevance and reliability of this information. 
(AS 1105.04 and .06)
The sample size the firm used in certain of its substantive procedures to test one type of revenue was too 
small to provide sufficient appropriate audit evidence because these procedures were designed based 
on a level of control reliance that was not supported due to the deficiencies in the firm’s control testing 
discussed above. (AS 2301.16, .18, and .37; AS 2315.19, .23, and .23A) 
Issuer G – Information Technology
Type of audit and related area affected
In our review, we identified deficiencies in the financial statement and ICFR audits related to Revenue.
Description of the deficiencies identified
The issuer used an internally developed IT system to track the volume of services provided for one 
type of revenue. In its testing of controls over this revenue, the firm tested various automated and IT-
dependent manual controls that used data from this system. The firm selected for testing a control over 
change management that consisted of a review of activity of certain developers with change access to 
this system. The firm did not evaluate whether this control was designed to address the risk of material 
misstatement with respect to developers with change access that were not selected for review. (AS 
2201.42) As a result of the deficiency in the firm’s testing of the IT general control discussed above, the 
firm’s testing of the various automated and IT-dependent manual controls was not sufficient. (AS 2201.46)
As a result of the audit deficiencies discussed above, the firm did not perform sufficient substantive 
procedures to test, or sufficiently test controls over, the accuracy and completeness of certain system-
generated data it used in its substantive testing of this revenue. (AS 1105.10)
Issuer H – Financials
Type of audit and related area affected
In our review, we identified deficiencies in the financial statement and ICFR audits related to the ACL.
Description of the deficiencies identified
The firm selected for testing a control that consisted of a committee's review of certain assumptions used 
to estimate the quantitative component of the ACL. The firm did not evaluate the review procedures 
that the control owners performed, including the procedures to identify items for follow up and the 
procedures to determine whether those items were appropriately resolved. (AS 2201.42 and .44)
The firm selected for testing a control that consisted of the review of the issuer’s risk assessment for 
certain graded loans. This control included the issuer’s assessment to determine which of these loans 
would be subject to an independent loan-grade review. The loan grades were an important factor in

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estimating the ACL. The firm did not identify that this control excluded certain loans from the issuer’s 
assessment. (AS 2201.42)
The sample sizes the firm used in certain of its substantive procedures to test the ACL were too small to 
provide sufficient appropriate audit evidence because these procedures were designed based on a level 
of control reliance that was not supported due to the deficiency in the firm’s loan-grading control testing 
discussed above. (AS 2301.16, .18, and .37; AS 2315.19, .23, and .23A)
Issuer I – Consumer Discretionary
Type of audit and related areas affected
In our review, we identified deficiencies in the financial statement and ICFR audits related to Going 
Concern.
Description of the deficiencies identified
The issuer used forecasted information to monitor its compliance with contractual debt covenants as 
part of the evaluation of its ability to continue as a going concern. The firm selected for testing a control 
that consisted of the issuer’s review of the reasonableness of this forecasted information. The firm did not 
evaluate the specific review procedures that the control owners performed to assess the reasonableness 
of this forecasted information. (AS 2201.42 and .44)
The firm used certain forecasted information that it obtained from a third party to evaluate whether or 
not there was substantial doubt about the issuer’s ability to continue as a going concern. The firm did not 
evaluate the relevance and reliability of this information. (AS 1105.04 and .06)
Issuer J – Financials
Type of audit and related area affected
In our review, we identified deficiencies in the ICFR audit related to the ACL.
Description of the deficiencies identified
The firm identified a control deficiency related to the accuracy and completeness of loan information 
entered into the issuer’s loan systems at origination and that was used in the estimation of the ACL for 
certain loans. The firm identified and tested three compensating controls that it believed mitigated this 
deficiency. The firm did not identify that the control owners used loan information in the performance 
of these compensating controls that was produced by the loan systems that were subject to the control 
deficiency. (AS 2201.68)
In determining whether the control deficiency represented a material weakness, the firm did not 
sufficiently evaluate the magnitude of the potential misstatements because it did not consider the 
potential effects on the calculated ACL related to the deficiency described above. (AS 2201.62) 
Issuer K – Financials
Type of audit and related areas affected
In our review, we identified deficiencies in the ICFR audit related to Investment Securities and 
Insurance-related Assets and Liabilities, Including Insurance Reserves.

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Description of the deficiencies identified
With respect to Investment Securities:
The firm selected for testing a control that consisted of a committee's review of securities to determine 
whether they met certain quantitative or qualitative factors that would indicate that these securities 
should be evaluated for possible impairment. The firm did not test an aspect of the control that 
addressed whether securities that met certain of those qualitative factors were identified for evaluation. 
(AS 2201.42 and .44)
With respect to Insurance-related Assets and Liabilities, Including Insurance Reserves: 
The issuer used policyholder data as the basis for its actuarial valuation of certain insurance-related assets 
and liabilities, including insurance reserves. The firm selected for testing a control that consisted of the 
reconciliation of policyholder data between the issuer’s policy administration system and the issuer’s 
actuarial valuation system. The firm did not identify and test any controls over the completeness of the 
reports generated from each of these systems that were used in the operation of this control. (AS 2201.39)
Issuer L – Industrials
Type of audit and related area affected
In our review, we identified deficiencies in the financial statement and ICFR audits related to Revenue.
Description of the deficiencies identified
The issuer recognized certain revenue when a product was shipped or upon completion of a service. 
The firm selected for testing a control over this revenue that consisted of the comparison of the terms of 
each sales transaction entered into the issuer’s system to corresponding invoices, purchase orders, and 
shipping or service documents before revenue was recognized. The firm’s procedures were not sufficient 
because the firm did not test whether the control owners reviewed evidence that products had been 
shipped or services had been rendered. (AS 2201.42 and .44)
The sample sizes the firm used in certain of its substantive procedures to test this revenue for these 
locations were too small to provide sufficient appropriate audit evidence because these procedures were 
designed based on a level of control reliance that was not supported due to the deficiency in the firm’s 
control testing discussed above. (AS 2301.16, .18, and .37; AS 2315.19, .23, and .23A)
Audits with a Single Deficiency 
Issuer M – Information Technology
Type of audit and related area affected
In our review, we identified a deficiency in the financial statement audit related to Going Concern.
Description of the deficiency identified
During the year under audit, the firm identified conditions and events that indicated there could be 
substantial doubt about the issuer’s ability to continue as a going concern for a reasonable period of 
time and concluded that the substantial doubt was alleviated by management’s plans. The firm did not 
sufficiently evaluate certain assumptions that the issuer used to project that it would comply with its 
debt covenants, which was a significant factor in management’s plans to overcome the adverse effects of 
the conditions and events. (AS 1105.04 and .06; AS 2415.08)

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Issuer N – Financials
Type of audit and related area affected
In our review, we identified a deficiency in the ICFR audit related to Pension Liabilities.
Description of the deficiency identified
The issuer provided an external specialist certain demographic and employment data that were used to 
estimate the issuer’s projected benefit obligation. The firm selected for testing a control that included 
a review of the accuracy of these data at an aggregated level and the investigation of year-over-year 
variances in the aggregated data. The firm did not evaluate whether the performance of the review at 
an aggregated level, in conjunction with certain thresholds the control owner used to investigate the 
variances, were sufficiently precise to detect misstatements that could be material. (AS 2201.42)

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PART I.B: OTHER INSTANCES OF NON-COMPLIANCE 
WITH PCAOB STANDARDS OR RULES
This section of our report discusses any deficiencies we identified that do not relate directly to the 
sufficiency or appropriateness of evidence the firm obtained to support its opinion(s) but nevertheless 
relate to instances of non-compliance with PCAOB standards or rules. 
When we review an audit, we do not review every aspect of the audit. As a result, the areas below were 
not necessarily reviewed on every audit. In some cases, we assess the firm’s compliance with specific 
PCAOB standards or rules on other audits that were not reviewed and include any instances of non-
compliance below. 
The deficiencies below are presented in numerical order based on the PCAOB standard or rule with 
which the firm did not comply. We identified the following deficiencies:  
	y
In one of 10 audits reviewed, the firm’s foreign affiliate had obtained letters of representation from 
management of certain of the issuer’s non-U.S. components and provided the firm with these letters 
and sufficient information to enable the firm to reconcile the financial statement amounts audited by 
the foreign affiliate to the information underlying the consolidated financial statements, but the firm, 
as the principal auditor, did not retain such letters and information. In this instance, the firm was non-
compliant with AS 1205, Part of the Audit Performed by Other Independent Auditors. 
	y
In two of 54 audits reviewed, the firm did not include all relevant work papers in the final set of audit 
documentation it was required to assemble. In these instances, the firm was non-compliant with AS 
1215, Audit Documentation. 
	y
In one of 10 audits reviewed, the firm did not make certain required communications to the issuer's 
audit committee related to the name, location, and planned responsibilities of an other accounting 
firm that performed audit procedures in the audit. In this instance, the firm was non-compliant with 
AS 1301, Communications with Audit Committees.
	y
In nine of 45 audits reviewed, the engagement team performed procedures to determine whether or 
not matters were critical audit matters but did not include in those procedures one or more matters 
that were communicated to the issuer’s audit committee and that related to accounts or disclosures 
that were material to the financial statements. In these instances, the firm was non-compliant with 
AS 3101, The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an 
Unqualified Opinion. These instances of non-compliance do not necessarily mean that other critical 
audit matters should have been communicated in the auditor’s report.

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PART II: OBSERVATIONS RELATED TO QUALITY 
CONTROL
Part II of our report discusses criticisms of, and potential defects in, the firm’s system of quality control. 
We include deficiencies in Part II if an analysis of the inspection results, including the results of 
the reviews of individual audits, indicates that the firm’s system of quality control does not provide 
reasonable assurance that firm personnel will comply with applicable professional standards and 
requirements. Generally, the report’s description of quality control criticisms is based on observations 
from our inspection procedures. 
This report does not reflect changes or improvements to the firm’s system of quality control that the 
firm may have made subsequent to the period covered by our inspection. The Board does consider such 
changes or improvements in assessing whether the firm has satisfactorily addressed the quality control 
criticisms or defects no later than 12 months after the issuance of this report.
When we issue our reports, we do not make public criticisms of, and potential defects in, the firm’s 
system of quality control, to the extent any are identified. If a firm does not address to the Board’s 
satisfaction any criticism of, or potential defect in, the firm’s system of quality control within 12 months 
after the issuance of our report, we will make public any such deficiency.

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APPENDIX A: FIRM’S RESPONSE TO THE DRAFT 
INSPECTION REPORT
Pursuant to Section 104(f) of the Act, 15 U.S.C. § 7214(f), and PCAOB Rule 4007(a), the firm provided a 
written response to a draft of this report. Pursuant to Section 104(f) of the Act and PCAOB Rule 4007(b), 
the firm’s response, excluding any portion granted confidential treatment, is attached hereto and made 
part of this final inspection report.
The Board does not make public any of a firm’s comments that address a nonpublic portion of the 
report unless a firm specifically requests otherwise. In some cases, the result may be that none of a firm’s 
response is made publicly available. 
In addition, pursuant to Section 104(f) of the Act, 15 U.S.C. § 7214(f), and PCAOB Rule 4007(b), if a firm 
requests, and the Board grants, confidential treatment for any of the firm’s comments on a draft report, 
the Board does not include those comments in the final report. The Board routinely grants confidential 
treatment, if requested, for any portion of a firm’s response that addresses any point in the draft that the 
Board omits from, or any inaccurate statement in the draft that the Board corrects in, the final report.

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October 17, 2022 
 
Mr. George Botic 
Director - Division of Registration and Inspections 
Public Company Accounting Oversight Board 
1666 K Street, N.W. 
Washington, D.C. 20006-2803 
 
Re: Response to Part I of the Draft Report on the 2021 Inspection of KPMG LLP 
 
Dear Mr. Botic: 
 
KPMG LLP is pleased to provide our response to the Public Company Accounting Oversight Board’s 
(“PCAOB”) Draft Report on the 2021 Inspection of KPMG LLP, dated September 14, 2022 (the 
“Report”). 
 
We respect and appreciate the commitment of the PCAOB staff, including its professionalism 
throughout the inspection process. The feedback and what we learn from the PCAOB inspection 
process are integral to how we consider our audit approach and provide opportunities for improvements 
going forward. We continue to design actions and decisions to promote audit quality that align with the 
root causes of matters identified during the PCAOB inspection process. We are strategically upskilling 
our auditors, developing and deploying technology, and designing and operating our system of quality 
control to sustainably and continually enhance audit quality. We are confident our ongoing investments 
will drive a more timely, streamlined, and technology-focused audit, better enabling our auditors to 
identify and respond to risks in the financial reporting process. 
 
We highly value our shared goal with the PCAOB -– maintaining integrity in the capital markets through 
high quality audits – and the PCAOB provides important perspectives and insights that enable us to do 
so. We remain committed to delivering high quality audits, grounded in a mindset of continuous 
improvement and integrity to the capital markets..  
 
We have reviewed the observations identified in Part I of the Report and taken appropriate actions to 
address the engagement-specific findings in accordance with PCAOB auditing standards as well as our 
own policies and procedures.  
 
We value and respect the inspection process and look forward to continued dialogue with the PCAOB 
on our audit quality improvements. We believe the audit quality initiatives we are driving will strengthen 
our audit process and the reliability of financial reporting more broadly to the benefit of the capital 
markets and global economy. This year’s inspection cycle once again affirmed the important role the 
PCAOB plays in improving audit quality.  
 
Sincerely yours,  
KPMG LLP 
 
 
 
 
 
 
Paul J. Knopp  
 
 
 
 
Scott D. Flynn 
Chair and CEO  
 
 
 
 
Vice Chair - Audit