Page 30 - Inspection Report 2018

The AOB observed that audit procedures to address the reported KAMs in the
EAR were not performed or documented in the assembled audit working papers.
The AOB will not tolerate such instances as it is a clear misrepresentation to the

shareholders and taints the integrity of the profession.

Auditors should continue to be vigilant of the specific requirements of ISA 701 Communicating Key Audit
Matters in the Independent Auditor’s Report where the rationale for the Auditor’s determination as to whether
or not each of these matters is a KAM should be documented in the assembled audit working papers.

Although 2 of 29 (7%) Engagements reviewed by the AOB had no KAMs communicated in the EAR, the
occurrence of such instances was observed to be uncommon globally. Where such conclusions are made,
auditors are required to sufficiently evaluate and document the rationale as to why there were no KAMs
communicated in the EAR.

Moving Forward …

Progressing towards the third year of implementation where investors become even more familiar with, 26%
and are able to make better use of the EAR, the scrutiny and accountability of the work performed by Others
auditors would magnify. The AOB continues to emphasise the importance of tailoring communication of (Individually less
than 6%)
KAMs and to avoid boilerplate reports, particularly to prevent misrepresentation in the audited financial
statements.

9%
Telecommunications
and Media

Source: AOB

AUDIT OVERSIGHT BOARD
28 ANNUAL INSPECTION REPORT 2018

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