The Indonesian Institute of Certified Public Accountants (IAPI) finalized the new and revised auditor reporting standards in July 2021. This includes a new Standard on Auditing (SA) 701, Communicating Key Audit Matters (KAMs) in the Independent Auditor’s Report which will be effective for the audits of the financial statements of listed entities that are prepared starting on or after 1 January 2022. This standard on auditing expected to provide greater transparency about the audit that would be performed and increase in the communicative value of an auditor’s report.
In response to SA 701, the Board Governance Forum of KPMG Indonesia hosted Key Audit Matters webinar, presented live on 23 September 2021. Indonesia is the last country in region in adopting this requirement. While KAM will have a pronounce impact on how the auditors prepare the reports, it will have a rippling effect as well to the audit clients. But to what degree this impact will have, it may not be well understood. So, to better learn about KAMs, there is no better way than to invite the experts from Singapore, Malaysia and Thailand to share their experiences when implementing KAMs in their respective countries.
The key takeaways that the speakers shared during the webinar were as follows:
- Think the auditors as your friends because they bring perspectives on key areas of concerns.
- Have early discussions about KAMs with relevant parties (e.g. the auditors, the audit committee members, independent directors, and relevant executive members) to reach a common understanding.
- Work together among the elements of Those-Charged-With-Governance (e.g. the audit committee members, independent directors, and relevant executive members) to get comfort with the numbers. Have management team to share how the numbers are prepared and their measurement basis.
Access the slides to the Key Audit Matters webinar.
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