Which of the following are tools KPMG has to check if an entity is restricted?
a-KICS
b-Sentinel Entity Management Tool
c-Global Compliance Confirmation System
d-PHAC
The correct answer and explanation is :
KPMG employs several tools to determine if an entity is restricted, ensuring compliance with regulatory standards and maintaining independence. Among the options provided:
a. KICS (KPMG Independence Compliance System):
KICS is an internal compliance system designed to monitor and manage the firm’s independence. It tracks financial relationships, investments, and other engagements that could potentially impair KPMG’s independence. By maintaining a comprehensive database of such information, KICS helps professionals identify and avoid interactions with restricted entities.
b. Sentinel Entity Management Tool:
The Sentinel Entity Management Tool is utilized to manage and monitor business relationships and potential conflicts of interest. It assists in identifying restricted entities by evaluating new and existing engagements against independence requirements, thereby preventing conflicts that could arise from associations with such entities.
c. Global Compliance Confirmation System:
While the Global Compliance Confirmation System is integral to KPMG’s compliance framework, its primary function is to facilitate periodic confirmations from professionals regarding adherence to independence and compliance policies. It does not directly serve as a tool for checking if an entity is restricted but supports the overall compliance infrastructure by ensuring that professionals acknowledge and confirm their compliance with relevant policies.
d. PHAC (Public Holdings and Affiliations Checker):
PHAC is designed to screen entities against lists of sanctioned individuals, entities, and countries. Its purpose is directly related to identifying restrictions, thereby aiding in compliance and risk mitigation efforts.
Conclusion:
Among the options provided, KICS, Sentinel Entity Management Tool, and PHAC are tools that KPMG utilizes to check if an entity is restricted. The Global Compliance Confirmation System, while crucial for compliance confirmations, does not directly function as a tool for identifying restricted entities.