Will all Auditor’s Reports include Key Audit Matters? 

Auditors of listed entities are required to communicate KAMs. Auditors of non-listed entities may voluntarily elect to communicate KAMs.

1If a matter meets the definition of a key audit matter and is also fundamental to users’ understanding of the financial report (meets the criteria for an emphasis of matter), how is this communicated in the auditor’s report? 

If key audit matters (KAMs) are communicated in the auditor’s report, and a matter meets the definition of a KAM, and in the auditor’s judgement is also of such importance that it is fundamental to users’ understanding of the financial report (ie. where the auditor contemplates communicating an emphasis of matter paragraph), the matter is communicated as a KAM in the auditor’s report (ie. not as an emphasis of matter). In this scenario the auditor may choose to highlight or draw further attention to the matter’s relative importance by presenting it first, or more prominently, in the KAM section, or include additional information in the description of the KAM to highlight the importance of the matter to users’ understanding of the financial report. (ASA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report, paragraph 8, A2)