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Chapter 11 4
6.4 Link with KAM
Some of the matters given above will be selected for inclusion in the Key Audit
Matters section of the auditor’s report for a listed company.
The purpose of including these matters is to assist users in understanding the entity.
Example 1
Key audit matters in the auditor’s report
During the audit of Oliver Co, a significant audit risk relating revenue
recognition was identified. The risk was addressed by assigning a more senior
member of the audit team to the audit of revenue and extensive audit
procedures were performed.
The risk relating to revenue recognition was discussed with those charged with
governance during the audit as required by ISA 260.
The engagement partner has selected revenue recognition as a key audit
matter to be communicated in the auditor’s report.
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