When submitting a Sentinel request, there are
several key elements you must focus on. First make sure you
select the correct engaging party(s), this includes, any party
who is: signing or otherwise bound to the engagement
contract, paying or receiving any of the engagement fees, or
has a role in defining the engagement scope or selecting
KPMG for the service. Choosing the engaging party(s) with the
correct legal name and Sentinel family tree icon allows the
system to guide requests through the appropriate independence
evaluation process, so it’s important to perform due
diligence, making sure you select the correct entities. If
you cannot find an entity in Sentinel, you can add a new
entity, however before doing so make sure you’ve done a
thorough search. It’s important to avoid creating duplicate
entities in Sentinel because this could lead to requests not
being routed to the correct Sentinel Lead Partner for
review, potentially causing independence violations. Once
you’ve selected the correct engaging party(s) within Sentinel,
you can move onto the other key elements you need to focus
on when completing a Sentinel request.
Second, select the correct taxonomy code that fully represents all aspects of
the proposed service. If there are various components to the
service, you’ll need to select multiple taxonomy codes. To
help evaluate service permissibility, you can access direct
links near the taxonomy descriptions to independence
guidance and engagement letter templates contained on the
Independence Non-Audit Services Portal. Be mindful that if
the wrong taxonomy code is selected, or the request is
missing a relevant taxonomy code, you will be required to
withdraw your Sentinel request and submit a new one with the
correct taxonomy code, which may cause delays with the
Sentinel review and approval process. So, as a best practice,
if there is uncertainty around what codes are to be used for
which services, reach out to your team leader for guidance.
Sentinel requests that include SEC audit clients and
affiliates or public interest entity audit clients and
related entities are required to have an engagement contract,
SOW, or equivalent attached in the request. The scope of
service in the contract must match the taxonomy codes
included in the request.
Third, select any relevant “Other Services” checkboxes applicable
to the service. For example, select the “Technology Solution with
Client Access” checkbox when services include licensing, or providing
client access to KPMG or third party technology solutions. Technology
solutions may include, but are not limited to, products,
software as service engagement enablers with client access,
Excel schedules, alliance partner applications or where we
implement third party technology, as well as the use of
survey tools. This does not apply to collaboration tools
that are solely used to share or send information between
KPMG and the client in order to perform the permissible service.
Fourth, include a detailed description of the service.
Make sure sufficient detail is provided so the
reviewer has a clear understanding of the service, can make
an informed assessment of its permissibility, determine its
potential effects on independence, and can effectively
communicate the scope of permissible services to the Audit
Committee for pre-approval, where required. The description of
the service in the Sentinel request should match the
description in the draft engagement letter or statement of work.
Ultimately the services that are performed and the
applicable deliverables provided to the client as part of
the engagement must also match the Sentinel description
This is referred to as a three-way match.
Fifth, select the fee arrangement and enter the fee range.
Under PCAOB Rule 3524, details of the fee structure are required to be
communicated in writing to the Audit Committee when seeking
pre-approval for tax services provided to SEC issuer audit
clients and subsidiaries. Permissible fee structures include
fixed or time-based arrangements. Certain fee arrangements
are not permitted for engagements with SEC restricted
entities, such as contingent fees. If the estimated fee range
changes, this field should be updated and discussed with the
Sentinel Lead Partner so that proper pre-approval can be
obtained from the client’s Audit Committee, where required.
The fee range should correspond to the fee estimate included
in the engagement letter. The high end of the fee range
should not exceed any fee limits included in the engagement
contract or the amount of the fees approved by the Audit Committee.
Sixth, document your conclusion of the
permissibility of the service in Sentinel. Document the
rationale for why the service is permissible under the
applicable independence standards and the threats and
safeguards evaluation either within the text box in Sentinel
or attach to your Sentinel request. It’s also important to
consider IESBA’s new requirement and document use of the
Advice and Recommendations exception, where applicable.
For services that involve SEC audit clients and their affiliates,
remember to attach a draft engagement letter,
statement of work, or similar detail of the scope of services
to be provided to the Sentinel request. Engagement letter
templates for audit and attestation services are found on Alex.
For non-audit services, professionals are encouraged
to use the engagement letters on the Independence Non-Audit
Services Portal when providing advisory services, or in the
Engagement Contracting Tool for tax services to ensure
services are appropriately scoped for SEC audit clients and
their affiliates. After you submit your request, you’ll need
to wait for a Sentinel Approval Number, often referred to as
a SAN, before the client can execute the engagement letter or
you can provide any service to the client. For recurring,
multi-year engagements, teams must submit a new Sentinel
request before KPMG is engaged to provide services for each
year’s engagement. For example, tax compliance services
scoped for a three-year period would require a new Sentinel
request each engagement year. Be mindful that each element
of a Sentinel request is a piece of the puzzle. To see the
full picture, every puzzle piece must be included. The
information provided in each field is critical to how the
service will be evaluated. Inaccurate or incomplete
information can result in an incorrect conclusion and can
expose the firm to numerous risks. If you have questions
while completing the Sentinel request, click on the question
mark icon for detailed guidance. The Sentinel Requestor User
Guide is also a great resource to reference.