Engagement Management

Introduction

Initiate the Engagement

Develop Engagement Strategy

Complete Budget, Resource Plan & Project Plan

Align with Team & Client

Execute, Monitor & Adjust

Resources & Wrap Up

Lesson 1 of 7

Introduction

This course introduces a new standardized approach

to engagement management to drive consistency in
how you initiate, plan and execute your end-to-end
audit practice.

Learning objectives
By the end of this course, you will be able to:

develop an engagement strategy that accelerates your work and leverages automated
tools and technology

increase your use of central teams and resources to meet key targets for work to be
offshored

align your resource plan, budget and project plan with your engagement strategy to
optimize audit quality and economic results

hold yourself and others accountable by promoting early and active up-front
involvement from all team members.
The goal is to execute high quality audits,
deliver a better experience for you and
your clients and increase efficiency on
every audit to even out your workload
throughout the year.

Our standardized Engagement Management approach has been launched on our Audit
portal. This training course will take you through some of the key concepts included in this new
and exciting approach to project managing our audits!

Review t he Engagement Lif ecycle Roadmap by clicking t hrough each number in t he

diagram below.
  


 

1. Initiate the Engagement

CEAC, Sentinel, IBS Codes, KCw, KCfc

2. Develop Engagement Strategy

Debrief prior year audit and develop current year strategy (set AQIs and KPIs for a successful audit)

3. Create Budget, Resource Plan & Project Plan

Create a plan that moves work earlier - set budget and project plan (ensure consistent with Milestones
for in-scope teams)
Ensure appropriate resources are booked to achieve budget and plan (consider core team, specific team
members, specialists, CRC and onshore central resources)

4. Align with Team & Client

Communicate and align strategy with core team, specific team members, specialists and client

5. Execute, Monitor & Adjust

Hold each other accountable to execute against your plan with upfront and active coaching and review
Consistently check in on engagement progress and adjust where needed (Milestone Monitoring teams
to review dashboard weekly and update when needed)

6. Close-out
Perform file assembly and close-out procedures
Lesson 2 of 7

Initiate the Engagement

By the end of this module, you will be able to describe the

processes involved in initiating the engagement and identify best

practices for completing these processes.
  Please not e t hat all links included in t his course can be f ound in t he
part icipant mat erials.

Sentinel
–
What : Submit a Sentinel request including all services to be provided under that Sentinel
request, in order to facilitate the identification of any independence issues or conflicts of
interest as required under applicable professional standards.

When: Before any work on the engagement begins

CEAC
–
What : Evaluate the appropriateness of the Client and Engagement Acceptance or
Continuance (CEAC) and document approval.

When: Before any work on the engagement begins; for Reporting issuers, no later than 30
days after issuing the auditor's report in accordance with Audit Risk Management Alert 2023-
03

T ip f or Success: Evaluate whether your engagement risk rating makes sense for the
engagement – challenge low or medium risk ratings when there have been significant
changes.
IBS Codes and Phases
–
What : Open IBS code to kick off economic and project planning and set phases in a level of
detail that is appropriate for your unique audit.

When: As soon as CEAC and Sentinel are approved

T ip f or Success: Discuss the code and phase structure with all stakeholders so everyone
understands how audit activities align with each phase of the audit, and expectations for
charging time.

Engagement Letter
–
What : Agree the terms of the engagement with a binding written engagement contract that
includes the scope of services, which should match the description of services outlined in the
approved Sentinel and CEAC.

When: Revised whenever there is a significant change to one or more of the terms of the
engagement or at minimum every five years; annually for PCAOB engagement letters for SEC
registrant audit clients

T ip f or Success: Refer to Best Practices for Assurance Engagement Letters for helpful
guidance related to engagement contracting.

KCw
–
What : Initiate creation or roll-forward of the KPMG Clara workflow (KCw) file.

When: After completing CEAC, Sentinel and IBS codes

T ip f or Success: Review the KCw Transition Guide to determine the most efficient way to roll
your file.
KCf c
–
What : Initiate creation or roll-forward of the KPMG Clara for clients (KCfc) site.

When: At planning when developing updated PBC lists

T ip f or Success: Project coordinators (PC) have been trained to assist with the creation, set
up and maintenance of KCfc sites. If you work with a project coordinator, consider involving
them in your KCfc journey.

MS Teams Channel
–
What : Submit a request to set up a new Teams collaboration space with channels (including
private channels) where team members can communicate, share information and
collaborate with real-time co-authoring.

When: After completing CEAC, Sentinel and IBS codes, and obtaining Lead Audit Engagement
Partner approval

T ip f or Success: Share documents by adding them to Teams files instead of shared server
folders as team members can collaborate in real-time and co-author files simultaneously.

Data Management Prof iling Survey

–
What : Submit the Data Management Profiling Survey to our Central Data Support Team
(CDST) to ensure that your team is connected with the right extraction resources and the right
team to perform data transformation and unlock analytics.
When: Shortly after your KCw file is created/rolled-forward; start early and perform a trial run
during interim or Q1 to ensure you resolve any issues earlier on

Independence Declaration Tracking Process

–
What : Validate that all engagement team members are compliant with relevant
Independence policies by requesting independence declarations from engagement team
members.

For SEC registrant audits, an independence declaration is required to be obtained from each
team member before any work can commence. Other audit engagement teams may
request independence declaration forms at the engagement Partner’s discretion.

When: After completing CEAC, Sentinel and IBS codes

T ip f or Success: Audit File Administrators (AFA) can assist engagement teams in identifying,
sending, tracking and following up on independence declaration sign-offs throughout the
engagement lifecycle.
Lesson 3 of 7

Develop Engagement Strategy

By the end of this module, you will be able to describe the

processes involved in developing engagement strategy and identify

best practices for completing these processes.

 D E B R I E F P R I O R YE AR E N G AG E M E N T D E VE L O P C U R R E N T YE AR S T R AT E G Y

What : Conduct debrief sessions to discuss what worked well, pain points, opportunities for
improvement and tangible actions to enhance the process.

Team debrief session: Include relevant team members, including core team, specific
team members and specialists who had significant involvement.

Client debrief session: Include relevant team members and client

contacts/stakeholders.

When: Before developing current year strategy

T ip f or Success: Use the Engagement Debrief Toolkit to facilitate the debrief.

D E B R I E F P R I O R YE AR E N G AG E M E N T D E VE L O P C U R R E N T YE AR S T R AT E G Y

What : Consider results from the debrief sessions and evaluate the impact on:

Planned scope & timing of work, including planned acceleration of procedures

according to the acceleration target below

Planned use of central resources, including Canadian Resource Centre (CRC) according
to the offshore target below, Audit File Administrators (AFA), Project coordinator support
(PC) and Central Data Support Team (CDST)

Planned use of automation and technology, including completion of Data Management

Profiling Survey, data management activities and use of tools such as KPMG Clara for
clients (KCfc), Engagement Budget Dashboard (EBD), DataSnipper, DataShare, Docusign
and Data & Analytics audit routines

Planned use of standardization, including completion of Minimum Standardized Audit

Procedures (MESPs) and use of standardized Test-work Templates for documentation

Planned KPIs and AQIs, including goals for acceleration of work, standardization,
automation and centralization, economic and audit quality targets and value-added
 services, and recommendations to management.

When: After prior year debrief sessions

T ip f or Success: Align your engagement strategy with the national firm targets below.
Lesson 4 of 7

Complete Budget, Resource Plan & Project

Plan

By the end of this module, you will be able to describe the

processes involved in completing the budget, resource plan and
project plan, and identify best practices for completing these

processes.
Budget

What : Use a standard budget template including PY actuals to increase budget quality and
have better forecasting and financial planning.

You may use either an automated budget or a static budget.

Automated Budget
The Engagement Budget Dashboard (EBD) is a tool for large audits that uses multiple
automations to pull IBS and Retain data for selected engagement codes daily or weekly and
helps to reconcile budgets to CY or PY actuals and Retain schedule. Though it requires time
upfront to set up, it provides features for scalability and flexibility. For example, it allows you to
create a budget by custom roles and phases, takes October promotions into consideration
and forecasts annual ERP with your desired level of precision.
Static Budget
You can also create a budget using the standardized static budget template. With a static
budget, engagement teams will manually populate PY IBS data into the template, periodically
reconcile budgeted hours to resources scheduled in Retain to ensure appropriate resources
are booked and periodically pull IBS WIP reports to compare to budget in order to monitor the
economic status of your engagement.
Resource Planning

What : Work with the in-charge and/or project coordinator to determine resources needed
to achieve engagement goals and requirements throughout all phases of your engagement,
including the core team, Specific Team Members, Specialists and central resources. Submit
your request via the “Rollforward Process” in your business unit.

T hen what ? The Business Unit Resourcing Team will finalize the resourcing plan in Retain.
When: Early in the engagement lifecycle, after developing the current year engagement
strategy, in conjunction with creating the engagement budget

T ip f or Success: Teams can use ePlanning and eQualify to verify that team members have

the appropriate capacity and skillset for the engagement. ePlanning will be covered in a
separate training.

What is eQualify?
eQualify integrates data from multiple systems (IBS, GLMS, CEAC, Retain, Oracle PeopleSoft/
RMS) to allow engagement partners and managers to assess whether team members
have the relevant accreditations for specific engagements. It also gives real-time visibility
into engagement hours and also allows you to initiate, monitor and complete workpapers.

eQualify will be phased in, impacting all US engagements inclusive of Audit and specialists
in Fall 2023 (US accreditations: AICPA, ICOFR, PCAOB, SEC, US GAAP).

Select this link to access eQualify and try following along with the videos. Note that this
will take you to a new window.
CEAC, GLMS, IBS, Retain and RMS contribute data to eQualify so you can see engagements that
you have charged or planned hours to, as well as your training history mapped to training
requirements.

CEAC data feeds provide eQualify with client and engagement characteristics (e.g. the
accounting framework: IFRS or US GAAP and/or auditing standard: US AICPA, US PCAOB, US
ICOFR, US SEC, etc.) to be able to link the right accreditations to your engagements and
provide engagement partners/managers an overview of their engagement team(s).

Tip f or Success: Because data is fed from source systems, it is important that you
practice data hygiene at the source so you get the most out of what eQualify can
offer.
 Select the image to enlarge.

eQualify calculates data from both IBS and Retain to show both planned and worked hours in
assurance and non-assurance work on engagements.

Tip f or Success: You can type "equalify" into your browser field to access eQualify and
explore further.

Project Planning

What : Use the Project Plan Allocation Template to save time when assigning due dates and
team member allocations to balance work throughout the year.

T hen what ? The Canadian Resource Centre (CRC) or a project coordinator (PC) can input
information from the Template directly into KCw Project Plan, which you can then use to
facilitate effective monitoring of engagement progress.
Reconciliation

What : Ensure that your resource plan effectively meets the scope and timing of the
engagement laid out in the budget and project plan.

Engagements with proposed fees greater than or equal to $100 000 must:

Reconcile hours between Retain and budget

Reconcile timing of resources with timing of due dates in project plan

Obtain review and approval by engagement partner

 Retain evidence of your reconciliation and approval for one year.

When: When budget, project plan and resource plan are initially set, and again when
resources are finalized in Retain

T ips f or Success:

Using the EBD will facilitate an automatic comparison of Retain hours to budgeted hours
for your engagement. Your team can use this to adjust any significant variance.

Engagement teams can follow the instructions in the static budget templates to perform
your reconciliation of your resource plan (Retain or Requested Resources) and project
plan due dates.
Lesson 5 of 7

Align with Team & Client

By the end of this module, you will be able to describe the

processes involved in aligning with team and client and identify best

practices for completing these processes.

Align With Internal Team
–
What :

Meet with relevant core team members, EQCR, Specific Team Members and Specialists
to discuss the current year engagement strategy and planned timing and scope of audit
procedures.

Align with central resource teams to ensure their availability.

Prepare a calendar of key dates and activities according to the current year
engagement strategy and availability of resources, then share it with all team members.

When: Continuously while building budget, project plan and resource plan, and again when
finalized

T ip f or Success: Once timing and scope is agreed by all parties, draft and send Specific
Team Members and Specialists Involvement workpapers for review and approval.

Component Auditors
–
What : When you are a group auditor, communicate planned scope & timing with other KPMG
Member Firms involved so component audit teams can plan and staff their component
audits.

When: As soon as possible and often with the caveat that final scoping may change

T hen what ? Issue Group Audit Instructions to communicate final planned scope and timing.
T ip f or Success: Communicate early and often with component audit teams so they are fully
aware of the planned scope and timing of the audit.

Client Kick-Of f Meeting

–
What : Meet with client to align on key aspects of current year engagement strategy and plan
in order to receive client input and buy-in on scoping, timing and fees. Share a tailored audit
calendar of key dates and activities and KCfc dates.

When: Throughout budget, project plan and resource plan development, and after they are
finalized, prior to completing and communicating the audit plan

T ip f or Success: Review the “Key milestones and deliverables” slide of our Audit Planning
Report for tips on items that should be included in your calendar for the client.

Risk Assessment and Planning Discussion (RAPD)

–
What : Use the appropriate version of the RAPD agenda to discuss matters affecting the
identification and assessment of risks of material misstatements with key internal team
members.

When: After obtaining an understanding of entity and environment but before designing and
executing the remainder of the audit plan

T ip f or Success: The more people you include in your RAPD meeting the better! Consider
including all key internal team members in your RAPD meeting including members of the core
audit team, Specific Team Members, Specialists, EQCR, component audit teams,
professionals performing walkthroughs, inventory count team members, etc.

Audit Planning Report (APR)

–
What : Draft the APR using the most current version of the APR.

When: After you develop your Project Plan and after you perform your initial Planning and Risk
Assessment procedures

T hen what ? The APR will then be reviewed and approved by Managers, Partners and EQC
before the draft is sent to management and/or the audit committee. It can then be finalized
and communicated.

T ip f or Success: Leverage an Audit File Administrator (AFA) to format your APR before
finalizing.
Lesson 6 of 7

Execute, Monitor & Adjust

By the end of this module, you will be able to describe the

processes involved in executing, monitoring and adjusting the audit,

and identify best practices for completing these processes.

Execute the Plan

When executing the audit plan, earlier work, working in KCw and a focus on upfront
supervision and review leads to better audit quality. T he more work you do upfront
means less work on the back-end!

Use the arrows to learn more.

 1

Send PBCs early

What: Send PBCs often and early. Consider sending separate PBCs for each of the
following phases/activities: risk assessment procedures, walkthroughs, evaluation of
D&I of controls, tests of operating effectiveness of controls, inventory counts,
interim work and year-end field work.

T ip f or Success: Use KCfc to populate, communicate and track your PBCs.

Leverage your project plan

What:

Ensure the project plan is always fully allocated for the current phase of the
audit and the next 30 days.

Ensure that the right resources are booked to complete their tasks.

Send reminders that work is coming due.

T ip f or Success: Leverage the Canadian Resource Centre (CRC) or a project

coordinator (PC) for support. Refer to the KCw Project Plan Allocation T emplate
and KCw Advanced Project Plan T ool.
 3

Work in KCw

What: Work within KCw to ensure compliance with our methodology and to reduce
inefficiencies. Your work product should be a result of the questions answered within
KCw and your workpapers. Remember to answer ALL questions asked in the tool.

T ip f or Success: Read KAEG guidance within the tool and continuously review the
KAEG workaround document.

Frequent status updates

What:

Set tangible goals and deliverables as final outputs of work for each block or
phase.

Host frequent status updates/audit progress meetings.

Create a culture of holding each other accountable and celebrating success

after each section of work is completed.

T ip f or Success: Use the Daily Huddle Meeting Agenda and Audit Progress Meeting
Agenda to guide your discussions.
 5

Active up-front coaching

What:

Engage in active up-front coaching to improve initial workpaper quality and

reduce review notes and related rework, ultimately reducing cycle time and
decreasing “crunch time” around addressing comments on a timely basis.

Preparers should set goals for deliverables.

Reviewers should commit to timely review at the end of the period of work, live
reviews and addressing and clearing review comments in a timely manner.

Do not wait until the last minute to perform your reviews.

T ip f or Success: Reviewers should leverage project plan and review notes summary
to understand progress prior to review. Reviewers can access our KCw Advanced
Project Plan T ool and Review Notes Dashboard for more features and ease of use.

Work together

What:

Be supportive and respectful of team members’ effort and time.

Commit to meeting your goals and expectations and chipping in where needed.
What : Monitor the progress of your engagement against your plan throughout the
engagement lifecycle. Adjust as needed to ensure that you can effectively meet
final deadlines and achieve economic goals without compromising on audit quality.

E N G AG E M E N T P R O G R E S S R E S O U R CIN G N E E D S BU D G E T & BILLIN G S

What : Use KCw Advanced Project Plan Tool, KCw Progress Tracker, KCw Review Notes
Dashboard and Engagement Management Checklist to more easily track the progress of
your file.

T ips:

Monitor KCw Advanced Project Plan Tool for unassigned activity screens or attachments
coming due in the next 30 days, duplicate assignments preventing an activity screen or
attachment from moving to next level of review, missing MRRs and elevated MRRs.

Monitor walkthroughs and inventory counts to ensure that documentation is uploaded to

KCw and reviewed in a timely manner.

Monitor component reporting compliance (for group audits).

E N G AG E M E N T P R O G R E S S R E S O U R CIN G N E E D S BU D G E T & BILLIN G S

What : Periodically check Retain to ensure that you have the right resources booked for the
next 30 days and throughout all phases to achieve your engagement strategy.

T ips:
 Use eQualify to check the training and experience of resources booked and compare to
your needs.

Ensure you have booked central team members, Specific Team Members and
Specialists time.

E N G AG E M E N T P R O G R E S S R E S O U R CIN G N E E D S BU D G E T & BILLIN G S

What : Monitor your economic progress throughout the audit using myReports from IBS, or
directly within your Engagement Budget Dashboard (EBD).

T ips:

Identify areas of overruns as soon as they occur so you can have informed discussions
early with the client if extra billings will be needed and/or can alter course.

Monitor that your billing schedule has been followed and bill to catch up when needed.
Close-out
Close-out will not be covered in this training. Stay tuned for Canadian close-out guidance

coming soon.
Lesson 7 of 7

Resources & Wrap Up

Resources

As you have seen, there are many resources available to assist you through managing your
engagement.

 Reminder: Links t o all t ools ment ioned t hroughout t his course can be
f ound in t he part icipant mat erials.

Two key resources for engagement teams are the Engagement Management portal page
and the Engagement Management Checklist.

Key points to remember

 Select the image to enlarge.

The six phases of the engagement management lifecycle are: Initiate the
Engagement; Develop Engagement Strategy; Create Budget, Resource
Plan & Project Plan; Align with Team & Client; Execute, Monitor & Adjust;
and Close-out.

Leverage the Engagement Management Approach to access resources

through all phases of the engagement management lifecycle to increase
standardization, automation and centralization to achieve high quality
audits.

Use the Engagement Management Checklist Tool to guide you through all
the steps of your audit.