Matters that Do Not Affect the Auditor’sMatters that Do Not Affect the Auditor’s Opinion

Matters that Do Not Affect the Auditor’s Opinion

8 In certain circumstances, an auditor’s report is modified by adding an emphasis of matter paragraph to highlight a matter affecting the financial report which is included in a note to the financial statements[1] that more extensively discusses the matter. The addition of such an emphasis of matter paragraph does not affect the auditor’s opinion. The paragraph would preferably be included after the paragraph containing the auditor’s opinion but before the section on any other reporting responsibilities, if any. The emphasis of matter paragraph would ordinarily refer to the fact that the auditor’s opinion is not qualified in this respect.

Significant Uncertainty - Going Concern

9 The auditor shall modify the auditor’s report by adding a paragraph to highlight a significant uncertainty regarding a going concern problem.

10 See ASA 570 Going Concern, for further mandatory requirements and explanatory guidance.

Significant Uncertainty - Other

11 The auditor shall modify the auditor’s report by adding a paragraph if there is a significant uncertainty (other than a significant uncertainty regarding a going concern problem), the resolution of which is dependent upon future events and which may materially affect the financial report.

Significant Uncertainty - Going Concern and Other

12 An uncertainty is a matter whose outcome depends on future events not under the direct control of the entity but that may affect the financial report.

13 Accounting estimates are customarily made in connection with amounts and other disclosures appearing in the financial reports. In most cases the auditor is able to be satisfied regarding the reasonableness of an accounting estimate, and mandatory requirements and explanatory guidance on this matter are contained in ASA 540 Audit of Accounting Estimates. Such an estimate will not ordinarily be regarded as a significant uncertainty for the purposes of this Auditing Standard.

14 The addition of a paragraph emphasising a significant uncertainty regarding a going concern problem or an other significant uncertainty is ordinarily adequate to meet the auditor’s reporting responsibilities regarding such matters. However, in extreme cases, such as situations involving multiple uncertainties that are significant to the financial report, the auditor may consider it appropriate to express a disclaimer of opinion instead of adding an emphasis of matter paragraph.

Additional Disclosures

15 When an unqualified opinion is expressed in the rare circumstances described in paragraph 34, the auditor’s report shall include an emphasis of matter section headed "Application of Australian Accounting Standard AASB ..." which: