Why has the Audit Report Changed? Has CaseWare Audit included a KAMs report?

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Enhanced auditor reporting requirements came into effect for the 31 December 2016 reporting season.  All auditors’ reports are now destined to look very different, and will report more information to provide greater transparency.

CaseWare A&NZ’s Tim Lew, Audit System Product Manager explains.

How has the Audit Report Changed?

The structure and order of the Audit Report has changed with the overall principle being to give prominence to the matters of most importance. If you consider the appendices from the previous ASA 700, the Audit Report structure included the Audit Opinion towards the bottom of the report. Whereas the new ASA 700 (issued by the AUASB as of December 2015), now includes the Audit Opinion as the most important item, at the very front of the report.

Why has the Audit Report Changed?

The Audit Report has changed to:

  • Enhance the communicative value of the Auditor’s Report;
  • Give prominence to the most important matters by re-ordering the content;
  • Enhance reporting on going concern matters (if applicable), and provide enhanced descriptions of the respective responsibilities of directors/management and the auditor, in relation to going concern;
  • Provide an affirmative statement on auditor’s independence and fulfilment of relevant ethical responsibilities;
  • Provide more information to users on the auditor’s responsibilities, and the key features of an audit;
  • Provide greater clarity around the auditor’s responsibilities in respect to – and the status of their consideration of – the other information that is included in an entity’s Annual Report;
  • Communicate matters of most significance to the audit (Key Audit Matters) of the current period and how the auditor addressed these;
  • Provide details of other information the auditor has received at the date of the Auditor’s Report, and is expected to receive after the date of the Auditor’s Report.

And for Listed Entities there are further changes to:

  • Communicate matters of most significance to the audit (Key Audit Matters) of the current period and how the auditor addressed these; and
  • Provide details of other information the auditor has received at the date of the Auditor’s Report, and is expected to receive after the date of the Auditor’s Report.

How does CaseWare Audit System deal with the new audit standard ASA 701? We’ve included three new workpapers, amended a swag of others and made a few other adjustments. Link to this FAQ to get more details.

Source: AUASB – Auditor Reporting FAQs