Audit report

Nothing’s particularly “standard” in AAA – everything “depends” on the given scenario – you can have some “ideas list” of things to think about, but there’s nothing that will apply in all cases.

For the matters to be considered in respect of uncorrected misstatements there are quite a few ideas in this article https://www.accaglobal.com/in/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/misstatements.html

For example:
– Materiality – individually and in aggregate – if the aggregate can be reduce to less than overall materiality, the audit opinion will be unmodified – so not all misstatements will need to be corrected (unless they are all individually material).
– “nature” of the misstatement – is it factual, judgmental or projected? Suppose there’s a factual error of $100k in trade receivables, which the auditor has extrapolated/projected to $1.3m for the population. The auditor isn’t going to ask management to correct for a “mere” projection that may not be accurate (if the auditor could have examined the entire population). But correcting for the actual error may be sufficient to reduce the aggregate.
– what does it affect? e.g. compliance with IFRS, debt covenants, management’s bonus, ratios ….

In terms of what should be discussed with management – well what is it that you want them to do? You’re not going to be able to persuade them to make them an adjustment for a projected error (and you shouldn’t ask them to!) – but you might persuade them to correct an actual error if that will avoid a qualified audit opinion. You might also want to remind them of their responsibilities for the financial statements as set out in the engagement letter, written management representations, etc

This article makes other references to “matters to consider” in different contexts https://www.accaglobal.com/uk/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/AAA-examiner-approach.html

This article includes “matters and evidence” https://www.accaglobal.com/uk/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/exam-tech3.html

And if the matters to be discussed with management leads into implications for the audit opinion/auditor’s report – this is the relevant article https://www.accaglobal.com/uk/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/exam-tech5.html

You are most welcome!