The PCAOBs recently revised auditor reporting standard includes a requirement for he auditor to communicate ortical udt matters. Crical audit maters include those matters during the audit that involved diffcult, subjective, or complex auditor judgments or that posed dfoulty to the auditor in obtaining sufcient appropriate evidence or in foming the opinion on the financial statements Similarly, the Intemational Auditing and Assurance Standards Board (AAS) recently revised the auditor's report in the ISAS to require auditors to communicate key audit matters. Key audit matters include communication of similar kinds of Information as noted by the PCAOB uch as areas of higher assessed risk of material misstatement and the effects of significant events or transactions that occumed during the period. Read the mouirements Requirement a. Desorbe how users of the francial statements may beneft from communications about these maters in an udt report. Users may find the dsdonures by the audtor about oritical audit matters helph in understanding Matters that wouA be disclosed provide users inights about the he auditor in obtaining suffcient aporopriate evidence for forming an opinion. Requirement b. Desorbe how communicion of Pese matters may not be benefcial to users of the financie statements Auditing financial statements is a Most investorn tailar with he detals of the audit process and they be able to epropriately evaluate many of the es daciosed and how the audtor reached his or her conclusions about the impect of hone tems on the francia statements and the audit process. Disciosure of ortcal udmaters about the nature of the auditors opinion provided in the audit report Opponents also believe disdiosure of such matters should come Requirement e. What dfoutes, if any, may auditors face in communicating about these matters? The chalenge for auditors when making disciosure of critical audit matters wil be Because most audits involve which may not improve communications to users of the financial statements. Disciosure of these matters ding Matters that would be some of the challenges and issues that arose during the audit. rs of 1 some of the standard procedures that are followed during the audit. process and ti the scope of the auditor's work and opinion on internal control over financial reporting. conclu sure of critical a what the auditors spent most of their time focused on during the audit. e aud Requirement a. Describe how users of the financial statements may benefit from communications about these matters Users may find the disclosures by the auditor about critical audit matters helpful in understanding the auditor about the Requirem ient most difficult, subjective, or complex auditor judgments or issues that posed the most difficulty to Auditing fil most difficult, subjective, or complex auditor judgments or issues that prevented appropriat ipac quemIO D. DeSCTDe TIO comm Most investors V fa he financial stateme of such matters sho Auditing financial statements is a appropriately evaluate many of the complex process that requires the knowledge, experience, and judgment of professional auditors. standarized process that any professional with adequate experience should be able to perform. Requirement c. What difficulties, V Most investors familiar with the details of the audit pr act of those items on the financ id the audit process. Disclosure also believe disclosure of such ome are are not h the details of the audit process and they be able to he audit process. Disclosure of critical audit he may not should Because most audits involve Users may find the disclosures by the auditor about critical audit matters about the Requirement b. Describe how communication of these matters may not E Auditing financial statements is a appropriately evaluate many of the issues disclosed and how the auditor re about the nature of the auditor's opin. auditors face in communicatin may create unnecessary confusion losure of critical audit matters w will only clarify any confusion cors nancial statements and the audit process. Disclosure of critical audit matters familiar with the details of the audit process and they be able to such matters should come from the audit committee rather than the board of directors. from the auditor rather than management. inications to users of the finar from management rather than the auditor. mamars stould come es, If any, may auditors face in communicating about these matters? an making disclosure of critical audit matters will be Because most au closure of determining which items should be communicated and the nature and extent of that communication. how to not breach client confidentiality in disclosing the critical audit matters. Requirement c. What difficulties, if any, may auditors face in communicating about these matters? The challenge for auditors when making disclosure of critical audit matters will be V which may not improve communications complex issues, the need to include such disclosures will likely lengthen the auditor's report substantially, complex issues, the need to include such disclosures will not affect the auditor's report substantially, standard issues, most disclosures will not be necessary and will not change the auditor's report substantially, standard issues, the need to include such disclosures will not change the auditor's report substantially, The chalilenge for auditors when making disolosure of critical audit matters will be which may not improve communications to user may increase second-guessing of the audit process, leading to decreased audit costs and reduced auditor litigation. may increase second-guessing of the audit process, leading to increased audit costs and unwarranted auditor litigation. will decrease second-guessing of the audit process, leading to decreased audit costs and reduced auditor litigation. will decrease second-guessing of the audit process, leading to increased audit costs and unwarranted auditor itigation