Understanding audit reporting changes : introduction of Key Audit Matters

The audit profession has gone through a series of polemics in the last decade, which led to the need of change and revision of audit reporting and audit quality. This study aims to investigate if users of audit reports agree with IAASB’s proposal to include a new section, Key Audit Matters (KAMs), in the audit report in order to include more information regarding the audit mission, with the aim of improving audit communication. This proposal comes after users perception of audit reporting quality has decreased over time. The authors achieve this objective by examining comment letters received by the IAASB at the 2013 Exposure Draft and invitation to comment, send by respondents from the European Union. The authors have found that most of the replies are in agreement with the regulating body’s proposals. However, there are several respondents who raise legitimate concerns regarding the implementation process of KAMs, and the effect KAMs will have on audit reporting. The authors conclude that KAMs are an important concept and that their introduction and applicability will have a positive effect in the audit reporting process.