Document ID: chunk:federal_register_of_legislation:F2023C01136:reg:9:p13
Version: federal_register_of_legislation:F2023C01136
Segment Type: reg
Provision Reference: reg 9 (pt 13/24)
Character Range: 39803–42859

such matters with those charged with governance often provides an indication of which matters are of most significance in the audit.  For example, the auditor may have had more in‑depth, frequent or robust interactions with those charged with governance on more difficult and complex matters, such as the application of significant accounting policies that were the subject of significant auditor or management judgement.

A28.         The concept of matters of most significance is applicable in the context of the entity and the audit that was performed.  As such, the auditor's determination and communication of key audit matters is intended to identify matters specific to the audit and to involve making a judgement about their importance relative to other matters in the audit.

A29.         Other considerations that may be relevant to determining the relative significance of a matter communicated with those charged with governance and whether such a matter is a key audit matter include:

           * The importance of the matter to intended users' understanding of the financial report as a whole, in particular, its materiality to the financial report.

           * The nature of the underlying accounting policy relating to the matter or the complexity or subjectivity involved in management's selection of an appropriate policy compared to other entities within its industry.

           * The nature and materiality, quantitatively or qualitatively, of corrected and accumulated uncorrected misstatements due to fraud or error related to the matter, if any.

           * The nature and extent of audit effort needed to address the matter, including:

                   + The extent of specialised skill or knowledge needed to apply audit procedures to address the matter or evaluate the results of those procedures, if any.

                   + The nature of consultations outside the engagement team regarding the matter.

           * The nature and severity of difficulties in applying audit procedures, evaluating the results of those procedures, and obtaining relevant and reliable evidence on which to base the auditor's opinion, in particular as the auditor's judgements become more subjective.

           * The severity of any control deficiencies identified relevant to the matter.

           * Whether the matter involved a number of separate, but related, auditing considerations.  For example, longterm contracts may involve significant auditor attention with respect to revenue recognition, litigation or other contingencies, and may have an effect on other accounting estimates.

A30.         Determining which, and how many, of those matters that required significant auditor attention were of most significance in the audit of the financial report of the current period is a matter of professional judgement.  The number of key audit matters to be included in the auditor's report may be affected by the size and complexity of the entity, the nature of its business and environment, and the facts and circumstances of