Effekten af indførslen af Key Audit Matters i den nye revisionspåtegning: Med fokus på implementeringsovervejelser i Danmark i 2016 -

Wedell-Wedellsborg Camilla Louise

Student thesis: Master thesis


The today’s auditor’s report on financial statements deliver a short standardized report that describes the financial statements subject to audit, the audit itself and the responsibilities of the management and the auditor. The cornerstone, and the focus of the readers, is the auditor’s opinion, which is either modified or unmodified. The today’s auditor’s report has been used for decades, and The International Auditing and Assurance Standards Board (IAASB) started in 2006 by researching the need for a new standard of the Auditor’s Report. The conclusion was that there is a demand for auditors to provide a greater transparency about significant matters in the financial statement, because the Audit Expectation-Performance Gap is too large. The research has resulted in a number of new international standards on auditing (ISAs), and a new auditor’s report is ready and effective for audits of financial statements for periods ending on or after December 15, 2016, and the most significant change is the description of KAM.The new auditor’s report has been implemented in the United Kingdom, and the auditor’s in the United Kingdom has already been using it for a couple of years. This makes it possible to analyze whether the impact on the Audit Expectation-Performance Gap has been reduced, and furthermore the analysis can contribute with information about the new section with KAM. The analysis will show what KAM the auditors have selected, how the KAM are described and what value does each KAM contribute with in the understanding of the auditors work. In my Thesis, I have examined whether the new auditors report, and especially the description of the KAM, will contribute to a larger transparency and whether it will generate a higher value in order to reduce the Audit Expectation-Performance Gap. Furthermore, my Thesis focuses on the implementation of the new auditor’s report in Denmark, and I will describe the challenges of implementing a new auditor’s report.The conclusion of the Thesis is that the new audit’s report will be significantly different from what we have been used to. The users have in the answers of both the Invitation to Comment and the Exposure Draft expressed that the new structure of the Auditor’s Report and the new description of the key audit matters is very useful and informative. However, there is a general concern that the variable information will be difficult for the users to understand, as well as a standardization of the description of the key audit matters will be less useful. The impact of the Audit Expectation-Performance Gap will be both positive and negative. The Audit Expectation Gap will be less than the current Auditor’s Report due to more information from the auditor to the readers; however there is a risk that the Performance Gap will be negatively affected because of the information overload in the new Auditor’s Report. The readers must turn to a new structure and they need to learn how to read the new Auditor’s Report to get the right information. This will take some time, and the background of introduction the new Auditor’s Report; providing greater transparency about significant matters in the financial statements, as well as the conduct of the individual audit, will be met in some new ways, but it will also create some new troubles. And the implementation in Denmark will require thorough introduction and publicity, if it is to be successful.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2015
Number of pages112