KAM reporting to improve audit quality of listed companies: Jamil Khatri

It is important for users to understand that KAM do not represent concerns that the auditor wishes to highlight, but are a summary of the most significant aspects dealt with during the audit

Audit report of listed companies in the current financial year (FY19) will for the first time contain a section called Key Audit Matters (KAM). In this section, auditors will report on matters that required significant auditor attention, including some judgmental calls in the audit opinion. Jamil Khatri, partner, BSR& Co, explains to Sudipto Dey, how this additional information in the audit report could help build a greater trust in the financial statements and the audit process. Edited excerpts:
 
How does reporting KAM help enhance the understanding of financial statements? Does it reflect the auditor’s concerns in financial statements?