This audit standard’s draft exposure was issued as of December 19, 2019, which regulates the auditor's responsibility to communicate key audit matters in the auditor's report. The purpose of communicating the main audit is to improve the communicative value of the auditor's report by providing better transparency over the audits that have been carried out. Communication of key audit matters in the auditor's report may also give the intended user a basis to better connect with management and those responsible for governance about certain matters relating to the entity, the financial statements audited or audited. The communication of the key audit matters in the auditor's report is not:

 

  1. as a substitute for disclosure in the applicable financial statements requiring management to make, or disclose things necessary to achieve reasonable presentation, 

  2. a substitute for the auditor expressing a modified opinion when the conditions of the audit engagement require modification in accordance with SA 705 (Revision), 

  3. substitute for reporting in accordance with SA 570 (Revised) when there is a material uncertainty regarding events that causes doubt of the entity's ability to maintain continuity of its business, or 

  4. a separate opinion on individual matters.

 

This audit standard applies a complete set of audits of the issuer's general purposes and conditions when the auditor decides to communicate the main audit in the auditor's report, and applies when the auditor is required by law to communicate key audit matters in the auditor's report.
 

From matters communicated to those responsible for governance, the auditor shall determine matters that require significant attention, namely areas with a higher risk of material misstatement or significant risk identified in accordance with SA 315 (Revised), The auditor's significant consideration relates to areas in the financial statements involving significant consideration of management, the impact on the audit of significant events or transactions that occurred during the period.

 

The auditor must outline each key audit matter, using the appropriate subtitle, a separate section of the auditor's report using the heading "Key Audit Matters." Key audit matters are not a substitute for modification opinions. There are several conditions when the key Audit Matters are not communicated i.e. the laws prohibit disclosure to the public, the auditor determines that it should not be communicated in the auditor's report because adverse consequences outweigh the public interest benefits. In the most significant terms, these are conveyed in the context of an audit of the overall financial statements and in formulating an opinion on the financial statements. However, there are conditions that the auditor should report matters in accordance with the applicable SA and include references on the Basis of Fair Opinion with Exceptions (Unnatural Opinion) or Material uncertainties related to the continuity of the Business in the Key Audit Matters section.

 

The auditor shall communicate to the responsible party for the governance of the matter that the auditor has specified as the key audit matters, if applicable, depending on the facts and conditions of the entity and the audit, determination by the auditor that there is no key audit matters thing to communicate in the auditor's report. The auditor shall include audit documentation on matters that require significant attention and underlying reasons for determining by the auditor whether it is a key audit matter or not, if applicable, the underlying reason for determining by the auditor that no key audit matters needs to be communicated in the auditor's report, and if applicable, the underlying reason for the determination by the auditor not to communicate in the auditor's report is what is specified as the key audit matters.

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