TWSA701 Communicating Key Audit Matters in the Independent Auditor’s Report

Status

Revised by Auditing Standards Committee in Taiwan on 4 October, 2022

Summary

This Standard deals with the auditor’s responsibility to communicate key audit matters in the auditor’s report. This Standard applies to audits of complete sets of general purpose financial statements of listed entities and circumstances when the auditor otherwise decides to communicate key audit matters in the auditor’s report. This Standard also applies when the auditor is required by law or regulation to communicate key audit matters in the auditor’s report. However, it prohibits the auditor from communicating key audit matters when the auditor disclaims an opinion on the financial statements, unless such reporting is required by law or regulation.
Key audit matters are those matters that, in the auditor’s professional judgment, were of most significance in the audit of the financial statements of the current period.
The auditor shall determine, from the matters communicated with those charged with governance, those matters that required significant auditor attention in performing the audit. The auditor shall determine which of the matters that required significant auditor attention were of most significance in the audit of the financial statements of the current period and therefore are the key audit matters.
The description of each key audit matter shall include a reference to the related disclosure(s), if any, in the financial statements and shall address why the auditor considered the matter to be one of most significance in the audit and how the matter was addressed in the audit. The auditor shall describe each key audit matter in the auditor’s report unless law or regulation precludes public disclosure about the matter, or the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
A matter giving rise to a modified opinion or a material uncertainty related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern are by their nature key audit matters. However, these matters shall not be described in the Key Audit Matters section. Rather, the auditor shall report on these matter(s) in accordance with the applicable Statements and include in the Key Audit Matters section a reference to the applicable section(s).
If the auditor determines that there are no key audit matters to communicate, the auditor shall include a statement to this effect in the Key Audit Matters section.

Effective date

This Standard is effective from 15 December, 2022.