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Dear Sir,
If the FS is true and fair, when do auditors use ‘EOM’ or ‘KAM’ paragragph?
Both are highlighting to report users about the auditors’ findings and response.Please advise.
Thank you.
KAM refer to key audit matters that can be taken to mean areas where the auditor had some difficulty. For example, matters where judgement was needed.
EOM is used when there is a material uncertainty with regard to an amount and this uncertainty has been disclosed in the notes. The KAM refers to the note. An example might be the results of a pending court case. There may be a matter which is not determined to be a KAM, but which, in the auditor’s judgement is fundamental to users’ understanding and for which an Emphasis of Matter paragraph may be considered necessary.
A matter cannot be both KAM and EoM. EoMs will be less common now that KAMs have been introduced.
See this excellent ACCA article:
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