Related Reporting Topics Flashcards
Critical Audit Matters (CAMS)
are required by the PCAOB to be communicated in audit reports of most issuers.
CAMS is the acronym for Critical Audit Matters.
Key Audit Matters (KAMS)
are included in reports of nonissuers.
this is reported only when the auditor has been engaged to report on the specific or specifics audit matters.
KAMs is an acronym for Key Audit Matters.
KAMS- Key Audit Matters comes from areas of complexity and significant management judgment in the financial statements.
usually reporting on Key audit matters-KAMS, does not substitute for:
1. Required management disclosures in the financial statements.
2. The auditor’s expression of a modified opion.
3. Reporting on an entity’s ability to continue as a going concern.
If the auditor is expressing and Adverse or disclaimer of opinion, no KAMS or Key Audit Matters are reported to avoid overshawdowing the auditor’s communication report.
Since the auditor was engaged to report in Key Audit Matters, if none are found, the auditor also reports that after considering the facts and circumstances of the entity and the audit, no KAMS exist to be communicated.
A review primarily involves performing analytical and inquiry procedures.
does not involves testing, obtaining evidence, applying certain other audit procedures or becoming aware of all significant matters identified in an audit.
A review is not intended to result in expression of an opinion.
provide any assurance on internal control or identify significant deficiencies or material weaknesses.
If identified, they must be communicated to those charged with governance.
Before accepting a review engagement, the auditor should request that manangement authorize communication with predecessor, The auditor should also determine that the framework is acceptable and obtain an agreement with management abouts its responsibilities.
All these are required prior to accepting the review engagement.
