Glossarytaught in M0.05, E11.04
Key audit matters
Also called KAM, key audit matter, critical audit matters, critical audit matter.
The matters the auditor judged most significant in the audit, described in the audit report along with how each was addressed.
They are the auditor telling you which numbers involved the most judgement, and that's the list an analyst wants. Revenue recognition, impairment testing, provisioning and the valuation of unquoted investments are the usual residents.
Written in plain language, the section takes three minutes to read. US auditors of listed companies report the equivalent as critical audit matters.
Judgements the auditor found hardest are the ones most capable of being wrong.