SA 701 deals with the auditor's responsibility to communicate key audit matters in the auditor's report. It is intended to address both the…
CA Intermediate · Auditing and Ethics · RTP · January 2026
SA 701 deals with the auditor's responsibility to communicate key audit matters in the auditor's report. It is intended to address both the auditor's judgement as to what to communicate in the auditor's report and the form and content of such communication. In the above context, explain the purpose of communicating key audit matters.
Suggested Answer and Working Notes:
Purpose of Communicating Key Audit Matters: As per SA 701, “Communicating Key Audit Matters in the Auditor's Report”, the purpose of communicating key audit matters is to enhance the communicative value of the auditor's report by providing greater transparency about the audit that was performed. Communicating key audit matters provides additional information to intended users of the financial statements to assist them in understanding those matters that, in the auditor's professional judgement, were of most significance in the audit of the financial statements of the current period. Communicating key audit matters may also assist intended users in understanding the entity and areas of significant management judgement in the audited financial statements.
Topics: Audit Report
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