Communication of Key Audit Matters in Public Accountant Reports on Audited Financial Statement in the Capital Market
Financial Services Authority Regulation Number 30 of 2023
On December 29, 2023, the Financial Services Authority (OJK) issued Regulation Number 30 of 2023 concerning the Communication of Key Audit Matters in Public Accountant Reports on Audited Financial Statements in the Capital Market (“POJK 30 of 2023”). This regulation aims to address disparities in the communication of Key Audit Matters in audit opinions on financial statements issued by entities operating in the capital market.
Key Audit Matters
The objectives of communicating Key Audit Matters, as outlined in Standards on Auditing 701 (Revised 2021) regarding the Communicating Key Audit Matters in the Independent Auditor’s Reports (“SA 701”), established by the Indonesian Institute of Public Accountants, are to:
- Enhance the communicative value of the auditor’s report by providing greater transparency about the audit performed.
- Provide additional information to intended users of the financial statement (“intended users”) to help them understand the matters that, in the auditor’s professional judgment, were most significant in the financial statements for the current period.
- Assist intended users in understanding the entity and areas of significant management judgment in the audited financial statements.
- Provide intended users with a basis for further engagement with management and those charged with governance regarding certain matters related to the entity, the audited financial statements, or the audit performed.
SA 701 applies to audits of complete sets of general-purpose financial statements of listed entities and circumstances when the auditor decides to communicate Key Audit Matters in the auditor’s report. This standard also applies when the auditor is required by law or regulation to communicate Key Audit Matters in the auditor’s reports. However, the standard prohibits the auditor from communicating Key Audit Matters when issuing a disclaimer of an opinion on the financial statements, unless such reporting is required by law or regulation.