Document ID: chunk:federal_register_of_legislation:F2023C01136:reg:9:p17
Version: federal_register_of_legislation:F2023C01136
Segment Type: reg
Provision Reference: reg 9 (pt 17/24)
Character Range: 50601–53481

estimation uncertainty or critical accounting estimates, as part of addressing why the matter was one of most significance in the audit and how the matter was addressed in the audit.

           * When the auditor concludes in accordance with ASA 570 that no material uncertainty exists relating to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern, the auditor may nevertheless determine that one or more matters relating to this conclusion arising from the auditor's work effort under ASA 570 are key audit matters.  In such circumstances, the auditor's description of such key audit matters in the auditor's report could include aspects of the identified events or conditions disclosed in the financial report, such as substantial operating losses, available borrowing facilities and possible debt refinancing, or non‑compliance with loan agreements, and related mitigating factors.[32]

Why the Auditor Considered the Matter to Be One of Most Significance in the Audit (Ref: Para. 13(a))

A42.         The description of a key audit matter in the auditor's report is intended to provide insight as to why the matter was determined to be a key audit matter.  Accordingly, the requirements in paragraphs 9–10 and the application material in paragraphs A12–A29 related to determining key audit matters may also be helpful for the auditor in considering how such matters are to be communicated in the auditor's report.  For example, explaining the factors that led the auditor to conclude that a particular matter required significant auditor attention and was of most significance in the audit is likely to be of interest to intended users.

A43.         The relevance of the information for intended users is a consideration for the auditor in determining what to include in the description of a key audit matter.  This may include whether the description would enable a better understanding of the audit and the auditor's judgements.

A44.         Relating a matter directly to the specific circumstances of the entity may also help to minimise the potential that such descriptions become overly standardised and less useful over time.  For example, certain matters may be determined as key audit matters in a particular industry across a number of entities due to the circumstances of the industry or the underlying complexity in financial reporting.  In describing why the auditor considered the matter to be one of most significance, it may be useful for the auditor to highlight aspects specific to the entity (e.g., circumstances that affected the underlying judgements 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