Document ID: chunk:federal_register_of_legislation:F2023C01136:reg:9:p19
Version: federal_register_of_legislation:F2023C01136
Segment Type: reg
Provision Reference: reg 9 (pt 19/24)
Character Range: 55907–58829

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 the risk of material misstatement.  In addition, the audit approach in a particular period may have been influenced by entityspecific circumstances, economic conditions, or industry developments.  It may also be useful for the auditor to make reference to the nature and extent of communications with those charged with governance about the matter.

A49.         For example, in describing the auditor's approach to an accounting estimate that has been identified as having high estimation uncertainty, such as the valuation of complex financial instruments, the auditor may wish to highlight that the auditor employed or engaged an auditor's expert.  Such a reference to the use of an auditor's expert does not reduce the auditor's responsibility for the opinion on the financial report and is therefore not inconsistent with paragraphs 14–15 of ASA 620.[33]

A50.         There may be challenges in describing the auditor's procedures, particularly in complex, judgemental areas of the audit.  In particular, it may be difficult to summarise the procedures performed in a succinct way that adequately communicates the nature and extent of the auditor's response to the assessed risk of material misstatement, and the significant auditor judgements involved.  Nonetheless, the auditor may consider it necessary to describe certain procedures performed to communicate how the matter was addressed in the audit.  Such description may typically be at a high level, rather than include a detailed description of procedures.

A51.         As noted in paragraph A46, the auditor may also provide an indication of the outcome of the auditor's response in the description of the key audit matter in the auditor's report.  However, if this is done, care is needed to avoid the auditor giving the impression that the description is conveying a separate opinion on an individual key audit matter or that in any way may call into question the auditor's opinion on the financial report as a whole.

Circumstances in Which a Matter Determined to Be a Key Audit Matter Is Not Communicated in the Auditor's Report (Ref: Para. 14)

A52.         Law or regulation may preclude public disclosure by either management or the auditor about a specific matter determined to be a key audit matter.  For example, law or regulation may specifically prohibit any public communication that might prejudice an investigation by an appropriate authority into an actual, or suspected, illegal act (e.g., matters that are or appear to be related to money laundering).

A53.         As indicated by paragraph 14(b), it will be extremely rare for a matter determined to be a