Question

Auditors should use emphasis of a matter paragraphs to draw attention to the fact that a required disclosure has been omitted from the financial statements. True or False?

Answer 1

True,

If the auditor wants to draw the attention of the users of financial statements about a matter that were already disclosed appropriately in the financial statements and he is of the view that those matters are very much important for better understanding of financial statements by users, then the auditor shall include a paragraph called Emphasis of matter paragraph in his report.

Emphasis of matter para is used to draw users attention to a matter or matters presented or disclosed in the financial statements that are of such importance that they are fundamental to users understanding of the financial statements or draw users attention to any matter or matters other than those presented or disclosed in financial statements that are relevant to user's understanding of the audit, the auditor's responsibilities of the auditor's report.

Examples for Emphasis matter paragraph

1)A major Catastrophe that has had, or continues to have, a significant effect on the entities financial position.
2) when facts become known to the auditor after the date of auditors report and the auditor provides a new or amended auditor's report.

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