Question

Many have called for the auditor’s report to be more informative and relevant therefore many changes happened in the auditor report in the last five years. especially ISA 706 , which is about “Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report. So you are required to show the reasons for the changes in ISA 706 and what is the impact of these changes on the auditor and other stockholders (Please write the answer so I can copy it)

Answer 1

Answers;

Sometimes the auditor considers it necessary to draw the user's attention to a matter presented or disclosed in the financial statement that, in the auditor's judgement , is of such importance that it is fundamental to user's understanding of the financial statements, the auditor shall include an Emphasis of Matter paragraph in the auditor's report provided the auditor has obtained sufficient appropriate audit evidence that the matter is not materially misstated in the financial statements.

If the auditor considers it necessary to communicate a matter other than those are presesnted or disclosed in the financial statement that, in the auditor's judgement is relevant to user's understanding of the audit, the auditor's responsibilities or the auditor's reposrt and this is not prohibited by law or regulation, the auditor shall do so in a pragraph in the auditor's report, with the heading other matter or other appropriate heading.

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