This document outlines an International Standard on Auditing regarding an auditor's responsibility to communicate key audit matters in the auditor's report. Key audit matters are those matters that were of most significance in the audit of the financial statements of the current period and are selected from matters that were communicated with those charged with governance. The auditor's report must describe each key audit matter, why it was considered significant, how it was addressed in the audit, and any related disclosures. If there are no key audit matters, the report will include a statement to that effect.

1. SALAHUDDIN BOKARI

2.  This International Standard on Auditing (ISA) deals with
the auditor’s responsibility to communicate key audit
matters in the auditor’s report.
 The purpose of communicating Key Audit Matter (KAM)
is to enhance the communicative value of the auditor’s
report by providing greater transparency about the
audit that was performed.

3. Those matters that, in the auditor’s professional
judgment, were of most significance in the audit of
the financial statements of the current period.
Key audit matters are selected from matters
communicated with those charged with governance.

4.  The auditor’s report for audits of financial statements of
listed entities.
 Also in the auditor’s reports for entities other than listed
entities where:
 Law or regulation may require Key Audit Matter
 Auditors may voluntarily, or at the request of
management or Those Charge With Governance,
communicate Key Audit Matter

5. Matters that were
communicated with those
charged with governance
Matters that required
significant auditor
attention
Matters of most
significance
in the
audit KEY AUDIT
MATTERS

6. The auditor will always consider:
 Areas of higher assessed risks of material
misstatements or significant risks.
 Significant auditor judgments relating to areas of
significant management judgment.
 Effect on the audit of significant events or
transactions.

7. Key Audit Matter is determined by the auditor’s
consideration of:
 Nature and extent of communication with Those
Charge With Governance.
 Importance to intended users’ understanding.
 Nature and extent of audit effort needed to
address.

8.  Severity of any control deficiencies identified
relevant to the matter.
 Nature and materiality, of the misstatements
due to fraud or error.

9. The auditor shall describe each key audit matter, using
an appropriate subheading, in a separate section of the
auditor’s report under the heading “Key Audit
Matters,”.
The introductory language in this section state that:
(a) Key audit matters are those matters that, in the
auditor’s professional judgment, were of most
significance in the audit of the financial statements

10. (b) These matters were addressed in the context of
the audit of the financial statements as a whole,
and in forming the auditor’s opinion thereon, and
the auditor does not provide a separate opinion on
these matters.

11. If the auditor determines that there are no key
audit matters to communicate , the auditor shall
include a statement to this effect in a separate
section of the auditor’s report under the heading
“Key Audit Matters.”

12. The description always includes:
 Why the matter was considered to be a key
audit matter
 How the matter was addressed in the audit
 Reference to the related disclosure(s), if any

13. The auditor have to document the professional
judgments made about:
 Why a matter that required significant auditor
attention is or is not a key audit matter
 If there are no key audit matter, the rationale
why
 Why a matter determined to be a key audit
matter is not communicated

14.  This ISA is effective for audits of financial statements
for periods ending on or after December 15, 2016.
 International Standards on Auditing
 https://www.ifac.org