Sept/Dec 2016 Q5. Raven& Co (b)

KAMs are those matters which, in the auditor’s professional judgement, were of most significance in the audit of the financial statements of the current period. They are selected from matters communicated to those charged to governance.
Inclusion of KAMs in the auditor’s report is a requirement only for LISTED companies.
So first and foremost – as Crow Co is not a listed co – there will be no KAM.
Even if Crow Co had been a listed co it is clear that the fire is an event after the reporting date and it has been adequately disclosed – so “only” an EoM. If it threatened going concern (which in this case it does not) it would be dealt with in a section “Material uncertainty relating to going concern”.
KAMs are generally those matters that required significant auditor attention in performing the audit (I would think of as matters that “kept the auditor awake at night”) – for example, i) matters of significant risk of misstatement, ii) significant accounting estimates with high estimation uncertainty or iiii) significant events or transactions during the period that affected the audit. An event after the reporting date is none of these things.