SA 706: Emphasis of Matter & Other Matter#
Emphasis of Matter Paragraph#
Used to draw attention to:
- Matter appropriately presented in financial statements
- Important for understanding financial statements
- Does not modify opinion
Examples
- Going concern uncertainty
- Major catastrophe affecting financial statements
- Subsequent events
- Prior period comparatives
Other Matter Paragraph#
Used to address:
- Matters not in scope of audit
- Regulatory requirements
- Communication with regulators
Differences#
| Emphasis of Matter | Other Matter |
|---|---|
| Matter in financial statements | Matter not in financial statements |
| Cannot override opinion | Does not affect opinion |
Reporting Requirements#
- Clearly distinguished from opinion
- Use heading "Emphasis of Matter" or "Other Matter"
- Reference to related note in financial statements