Emphasis of Matter Paragraphs in the AudEmphasis of Matter Paragraphs in the Auditor’s Report

Emphasis of Matter Paragraphs in the Auditor’s Report

1. If the auditor considers it necessary to draw users’ attention to a matter presented or disclosed in the financial report that, in the auditor’s judgement, is of such importance that it is fundamental to users’ understanding of the financial report, 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 report. Such a paragraph shall refer only to information presented or disclosed in the financial report. (Ref: Para. A1-Aus 2.1)

Aus 6.1 In addition to the requirements in paragraph 6 of this Auditing Standard, the auditor shall include an Emphasis of Matter paragraph in the auditor’s report where required by other Auditing Standards. (Ref: Appendix 1)

1. When the auditor includes an Emphasis of Matter paragraph in the auditor’s report, the auditor shall:
   1. Include it immediately after the Opinion paragraph in the auditor’s report;
   2. Use the heading “Emphasis of Matter,” or other appropriate heading;
   3. Include in the paragraph a clear reference to the matter being emphasised and to where relevant disclosures that fully describe the matter can be found in the financial report; and
   4. Indicate that the auditor’s opinion is not modified in respect of the matter emphasised. (Ref: Para. A3-A4)

Aus 7.1 When the financial report has been prepared in accordance with Australian Accounting Standards but additional disclosures have been made in the financial report:

 on the basis that, or which imply that, application of a particular Accounting Standard has resulted in the financial report being potentially misleading; or

 that, in the opinion of those charged with governance, are necessary to present a true and fair view; and

the auditor is of the opinion that:

(a) it is likely, in the absence of the additional disclosures, that users would be misled when making evaluations or decisions about the allocation of scarce resources; and

(b) the additional disclosures contain all, and only, relevant and reliable information, and are presented in such a manner as to ensure the financial report as a whole is comparable and understandable in meeting the objectives of the financial report,

the auditor shall include in the auditor’s report an Emphasis of Matter paragraph headed "Application of Australian Accounting Standard AASB ..." or an appropriate alternative which:

(i) draws attention to the additional disclosures;

(ii) where relevant, states that in the auditor's opinion application of the particular Accounting Standard has, in this instance, resulted in the financial report being potentially misleading;