Revisors rapportering af Key Audit Matters

Ditte Jørgensen & Thomas Jørgensen

Student thesis: Master thesis


The financial crisis has resulted in a debate about what the auditors’ role is and about the purpose of the auditor’s report. The debate resulted in the European Commission’s proposal for a new improved auditor’s report in the Green Paper on audit policy in 2010 and IAASB started working on proposals for new standards to the auditor’s report. Standards that should provide the financial statement users with more relevant information.That led to the approval of the new ISA 701 and it also led to a number of revisions to existing standards. The auditor shall communicate those matters that required most significance in the audit of the financial statements of the current period and therefore are the Key Audit Matters (KAM). The auditor shall take into account areas of higher assessed risk of material misstatement, significant management judgement, significant events or transactions that occurred during the period. The purpose of auditors communicating KAM is to enhance the communicative value of the auditor’s report by providing more transparency about the audit that was carried out Communicating KAM may also assist users in understanding the entity and areas of significant management judgement in the financial statements.This thesis has investigated the reactions to the new standards in Denmark by interviewing Danish analysts. The reactions have been positive and the analysts welcome the new standards and the more informative auditor’s reports. Furthermore, an interview with a Danish auditor at PwC, who is responsible for the implementation of KAM in PwC Denmark, and an interview with Novo Nordisk have been completed. In addition, we have analysed audit reports from England where a similar standard to the auditor’s report has been rolled out. The reactions from stakeholders have also been positive, referring to “sea change” in auditor reporting. We believe the new reports will stimulate enhanced conversations among auditors, companies, audit committees, stakeholders and regulators. Our expectation of the new auditor’s report is that the more informative reports and dialogue will demonstrate more visibly the value and relevance of audit and hereby reduce the expectation gap between users and the auditors. We believe that the new audit reports can be a game changer for stakeholders and the profession. It is a necessary step in trying to reduce the expectation gap. It is important that auditors are committed to producing informative and insightful reports that reflect the spirit of the reforms. This is extremely important to ensure that audit reports bring the most value to the users and to ensure that communicating KAM does not become a generic boilerplate

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2015
Number of pages208