Document ID: chunk:federal_register_of_legislation:F2023C01136:reg:9:p18
Version: federal_register_of_legislation:F2023C01136
Segment Type: reg
Provision Reference: reg 9 (pt 18/24)
Character Range: 53237–56188

made in the financial report of the current period) in order to make the description more relevant for intended users.  This also may be important in describing a key audit matter that recurs over periods.

A45.         The description may also make reference to the principal considerations that led the auditor, in the circumstances of the audit, to determine the matter to be one of most significance, for example:

           * Economic conditions that affected the auditor's ability to obtain audit evidence, for example illiquid markets for certain financial instruments.

           * New or emerging accounting policies, for example entity‑specific or industry‑specific matters on which the engagement team consulted within the firm.

           * Changes in the entity's strategy or business model that had a material effect on the financial report.

How the Matter Was Addressed in the Audit (Ref: Para. 13(b))

A46.         The amount of detail to be provided in the auditor's report to describe how a key audit matter was addressed in the audit is a matter of professional judgement.  In accordance with paragraph 13(b), the auditor may describe:

           * Aspects of the auditor's response or approach that were most relevant to the matter or specific to the assessed risk of material misstatement;

           * A brief overview of procedures performed;

           * An indication of the outcome of the auditor's procedures; or

           * Key observations with respect to the matter,

    or some combination of these elements.

    Law or regulation or national auditing standards may prescribe a specific form or content for the description of a key audit matter, or may specify the inclusion of one or more of these elements.

A47.         In order for intended users to understand the significance of a key audit matter in the context of the audit of the financial report as a whole, as well as the relationship between key audit matters and other elements of the auditor's report, including the auditor's opinion, care may be necessary so that language used in the description of a key audit matter:

           * Does not imply that the matter has not been appropriately resolved by the auditor in forming the opinion on the financial report.

           * Relates the matter directly to the specific circumstances of the entity, while avoiding generic or standardised language.

           * Takes into account how the matter is addressed in the related disclosure(s) in the financial report, if any.

           * Does not contain or imply discrete opinions on separate elements of the financial report.

A48.         Describing aspects of the auditor's response or approach to a matter, in particular when the audit approach required significant tailoring to the facts and circumstances of the entity, may assist intended users in understanding unusual circumstances and significant auditor judgement required to address