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CA Intermediate · Auditing and Ethics · Audit Report

CA Rohan is auditing Himalaya Pharma Ltd, a listed company. In forming his view, he identifies the matters that required most significant auditor attention and were of most significance in the audit of the current period. Which communication in the audit report is meant for these matters?

The Key Audit Matters section is used. SA 701 requires listed entity auditors to describe the matters of most significance in the current period audit, chosen from those communicated with those charged with governance. Emphasis of Matter and Other Matter paragraphs address disclosed fundamentals or unrelated matters instead.

  1. AEmphasis of Matter paragraph
  2. BOther Matter paragraph
  3. CKey Audit Matters sectionCorrect
  4. DBasis for Opinion section

Explanation

SA 701 requires Key Audit Matters to be communicated for listed entities. KAMs are those matters that, in the auditor's professional judgment, were of most significance in the audit of the current period's financial statements, selected from matters communicated with those charged with governance. EOM and OM paragraphs serve different purposes.

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