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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Auditor's reports

In the audit of Norwood plc, the auditor determines there are no key audit matters to communicate, other than matters giving rise to a modified opinion. The audit is of a listed entity. What does ISA 701 require the auditor to do?

The auditor includes the KAM section and states that there are no key audit matters to communicate in the report. The section is not omitted, and the auditor must not invent a matter or use an Emphasis of Matter paragraph instead.

  1. AOmit the KAM section entirely without comment
  2. BState in the KAM section that there are no key audit matters to communicate in the reportCorrect
  3. CInclude at least one KAM to satisfy the reporting requirement
  4. DIssue an Emphasis of Matter paragraph instead

Explanation

ISA 701 allows that the auditor may determine there are no KAMs to communicate, in which case the report states that there are none, unless a modified-opinion matter or going concern uncertainty is reported elsewhere. Inventing a KAM or substituting an Emphasis of Matter is not required.

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