QUESTION ONE

In the last couple of decades (2000 to 2020), the audit profession has seen significant reforms to audit regulations. Key Audit Matters (KAMs) were introduced in 2017, requiring Australian based auditors to identify key audit risks and the audit procedures undertaken related to those key risks in the statutory audit report. It was hoped that these disclosures would assist in narrowing the audit expectations gap.

REQUIRED:

What is the purpose of the KAM audit reforms? Have the KAM audit reforms helped narrow the audit expectations gap in your opinion? Discuss with reference to the definition of the audit expectations gap, and relevant real-life cases, including any which were discussed during this semester in class.