What is Key Audit Matters (KAM)

The responsibility of auditors is a controversial topic that has brought much debate amongst academics and experts alike in recent years. This chapter's aim is to set the framework in which audit reporting exists: part of the wider landscape of corporate reporting and the final fragment of the sphere of the financial statements audit quality. By using a general-to-specific deductive approach, the authors discuss the international and European perspectives on the process of financial statement audits, as well as the stakeholders or audit and audit reporting, in order to clearly define the regulatory space in which any changes in this field occur. The authors also discuss the theories that explain the process of audit reporting, with an emphasis on the lending credibility theory, the inspired confidence theory, and the sociology of education theory. The authors consider that these theories explain the improvements undertaken to improve the communicative value of the audit quality.