Auditor‘s Report & Emphasis OF Matters


What is Emphasis of Matters :

Emphasis of matter is a type of paragraph in an auditors’ report on financial statements of any enterprises.

AS per SA-706 , the following terms have been defined as:

(a) Emphasis of Matter paragraph

A paragraph included in the auditor’s report that refers to a matter appropriately presented or disclosed in the financial statements that, in the auditor’s judgment, is of such importance that it is fundamental to users’ understanding of the financial statements.

(b) Other Matter paragraph

A paragraph included in the auditor’s report that refers to a matter other than those presented or disclosed in the financial statements that, in the auditor’s judgment, is relevant to users’ understanding of the audit, the auditor’s responsibilities or the auditor’s report.

What are the matters normally included under “Emphasis of Matters”:

Under emphasis of matters auditors cover those issues/information where he is of opinion that matter is properly disclosed in financial statement but attention of users is required

What are the matters normally included under “Other Matters”:

Auditors cover here other than those matters presented or disclosed in financial statement and in the auditors judgement is relevant to user’s, understanding of the audit of the auditor’s responsibility or auditor’s report.

Examples of matters normally included in emphasis of matters:

  • Disclosure is made in financial statement but there is a violation of large requirement.
  • An uncertainty to future outcome of exceptional litigation.
  • Major fine in the organization after balance sheet date and before the date of report.
  • Any other matter required under local law.
  • A general or specific event that has had or continues to have and significant effect on the financial of the company.

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