This analysis was originally posted by Audit Analytics.
Fiscal year 2017 marks the first full year that Key Audit Matter (KAM) disclosures were required in all EU member states.1 In this analysis, we look at KAM disclosures from the audit opinions of approximately 1,400 companies listed on European Stock Exchanges, focusing on select large-, mid-, and small- cap indexes for 2017 and 2018.
As shown in the graph below, the most common number of KAMs disclosed in both years was two (32% in 2018 and 29% in 2017). Although companies disclosing three KAMs were not far behind, with a frequency of 28% in 2018 and 27.5% in 2017.
Looking at these numbers from a higher level, 46% of companies had only one or two KAMs in 2018, an increase from 41% in 2017. Expanding even further, 88% of companies had between one and four KAMs in 2018, versus 87% in 2017.
With that being said, only about 12% of companies disclosed five or more KAMS. So, which companies are reporting the most KAMs?
In 2017, Rolls-Royce Holdings was the only company to report ten KAMS; that number decreased to eight in 2018, though the company remained at the top of the list in terms of number of KAMs. Conversely in 2018, John Wood Group was the only company to report nine KAMs, an increase from the seven they disclosed in 2017.
Interestingly, KPMG served as the auditor of the companies with the highest number of KAMs in both 2017 and 2018.
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1. Under ISA 701 KAMs were required for fiscal years ending on or after December 15, 2016. 
