Key audit matters appear in the auditor's reports of public interest entities (for example listed companies). For each matter, the report explains why it was considered a key audit matter and how it was addressed in the audit.
Revenue recognition, goodwill impairment testing and provisions are common key audit matters. This section shows investors the focus areas of the audit; it does not mean the opinion is modified.
Source: BDS 701
Related terms
Independent auditor's reportThe formal report in which the auditor sets out in writing the opinion reached on the financial statements and the basis for that opinion.Public interest entityEntities considered to be of public interest because of their business, size or number of stakeholders, and subject to stricter audit rules.GoodwillThe excess of the consideration paid in a business combination over the fair value of the acquired business's identifiable net assets.Adverse opinionThe opinion in which the auditor states that the financial statements are not presented fairly, where misstatements are both material and pervasive.Agreed-upon proceduresAn engagement in which the practitioner performs procedures agreed with the entity and, where relevant, a third party, and reports only the findings without providing assurance.Analytical proceduresThe evaluation of financial information through analysis of plausible relationships among financial and non-financial data.
Last updated: October 22, 2026 · This definition is for general information only.