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Audit and assurance alert: CAS 701 Key audit matters

Learn about communicating key audit matters in the independent auditor's report.

This Audit and Assurance Alert was originally published in May 2017 and has been updated in December 2018 to address the change in scope of when key audit matters are to be identified.

Audit and Assurance Alert: CAS 701, Communicating Key Audit Matters in the Independent Auditor's Report raises awareness about the requirements pertaining to key audit matters when CAS 701 has been applied. CAS 701 applies to audits of complete sets of general purpose financial statements when either the auditor decides to communicate key audit matters in the auditor's report or when the auditor is required by law or regulation to communicate key audit matters in the auditor's report.

These revisions are effective for audits of financial statements for periods ending on or after December 15, 2018.

For periods ending on or after December 15, 2020, key audit matters are to be communicated for audits of complete sets of general purpose financial statements of entities listed on the Toronto Stock Exchange (TSE), other than entities required to comply with National Instrument 81-106, Investment Fund Continuous Disclosure.

Topics include:

  • what key audit matters are
  • when to communicate key audit matters
  • how to determine key audit matters
  • how to communicate and describe key audit matters (including an illustrative example)