PSA

UPDATES 28/10/17

PSA 700 (Revised), Forming An

Opinion and Reporting on Financial
Statements

PSA 701, Communicating Key Audit

Matters in the Independent Auditor’s Report

PSA 705, Modifications to the Opinion

in the Independent Auditor’s Report

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PSA 706 (Revised), EOM and OM

Paragraphs in the Independent
Auditor’s Report

PSA 570 (Revised), Going

Concern

PSA 260 (Revised), Communication

with Those Charged with Governance

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Communicated with TCG

Required
significant auditor
attention

KAM

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Areas of higher assessed RMM

Areas with (source of) significant risks

Areas with significant auditor’s judgment

(e.g., items with é estimation uncertainty

Significant events or transactions that

affected the audit

Importance of matter to users

Underlying accounting policy

(complexity)

Nature and extent of audit effort; severity

of audit difficulty

Severity of control deficiencies

Description of the KAM

Audit procedures/considerations
applied to the KAM

Reference to the related note in the FS

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Audit Response/Approach to KAM

Overview and outcome of

procedures

Other key observations

CEntity specific

DNot imply KAM is unresolved

DNot contain discrete opinion on

KAM

EOM and OM cannot

replace KAM requirement

Matters which give rise to

modification are KAM

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Why a matter given significant

attention is not considered a KAM
(as applicable)

If no KAM is identified, the said

fact and reason.

Why matter considered a KAM is not

communicated.

Can KAM be included for modified

opinions of listed clients?

For qualified and adverse opinions,

KAM is required. For disclaimer of
an opinion, a KAM is prohibited.

Can there be no KAM for listed

audit clients?

In certain limited situations, yes

there may be no KAM (theoretically).
In such situations, a statement to
that effect must be made.

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Can there be an identified KAM but

not included in the report?

In extremely rare circumstances, the

auditor may do so. However, it must
be evident that adverse effect of the
KAM may outweigh public interest
benefits.

Enhanced management’s and TCG’s

responsibility

Enhanced auditor’s responsibility

paragraph to include GC

Need a paragraph for material going

concern uncertainties

Description when use of

GC is appropriate

Highlights responsibilities to make

GC assessments and evaluate
whether assumption is appropriate.

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Responsibility to conclude on
appropriateness of management’s
assessment

Responsibility to conclude
whether material uncertainty
exists.

Unmodified opinion

Material Uncertainty Related to Going Concern

Section

Reference to the related note disclosure on

Going Concern

Statement that such event may cast significant

doubt on the ability to continue as a GC

Qualified or Adverse Opinion

Basis for Adverse (Qualified)

Section

Statement that such event may cast

significant doubt on the ability to
continue as a GC

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