In January 2015, the International Auditing and Assurance Standards Board (IAASB) released its new and revised auditor reporting standards that are designed to significantly enhance auditor's reports for investors and other users of financial statements. The most notable enhancement was a new requirement for auditors of listed entities' financial statements to communicate 'Key Audit Matters' (KAMs) that the auditor views as most significant, with an explanation of how they were addressed in the audit.

The ACCA report reviews the implementation of these new standards in eleven countries across four different continents. It reports the findings from a review of 560 new-style audit reports and also feedback gained during roundtables.

The key finding of ACCA’s report is that the benefits of KAMs go beyond better information for investors to encompass improved governance, better audit quality and enhanced corporate reporting. Specifically the report indicates:

• KAMs encourage better conversations between the auditor and those charged with governance; this in turn contributes to better governance.
• KAMs help the auditor to focus on the areas of the audit requiring the most careful judgement; this in turn contributes to higher audit quality.
• KAMs give preparers incentives for revisiting financial reporting and disclosures in areas related to those KAMs. This in turn leads to better financial reporting.

A press release and the full report are available on the ACCA website.