- 4 Marks
Question
An auditor’s report may include an ‘emphasis of matter’ paragraph and/or an ‘other matter’ paragraph. These types of paragraph are the subject of ISA 706: Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report. The purpose of these paragraphs is to provide additional communication in the auditor’s report.
Required:
Differentiate between the ‘emphasis of matter’ paragraph and ‘other matter’ paragraph citing ONE (1) circumstance in each case. (4 marks)
Answer
An emphasis of matter paragraph draws the attention of users to an item (or ‘matter’) that is included in the financial statements and which the auditor considers fundamental to an understanding of the financial statements.
- Note that if such a matter is considered a ‘Key Audit Matter’ (per ISA 701), then it shall be addressed in the ‘key audit matters’ section of the auditor’s report rather than in an ‘emphasis of matter’ paragraph.
An other matter paragraph deals with a matter which is not included in the financial statements but which is relevant to an understanding of the audit, the auditor’s responsibilities or the auditor’s report.
(4 marks)
- Tags: Auditor's Report, Emphasis of Matter, ICAG, Other Matter
- Level: Level 3
- Topic: Current issues, Reporting
- Series: MAR 2023
- Uploader: Dotse