Question

What is an ‘emphasis of matter’ paragraph? When do you think an auditor would use it?

Answer 1

Emphasis of Matter :-

Emphasis of Matter paragraph is included in the auditor's report that generally refers to the matter that has been presented in the financial statements of the company, that , in the auditor's judgement is of such importance that is neceessary for the user's understanding of the financial statements.

The emphasis of matter paragraph directs the user to the important points in the financial statement that the auditor considers necessary and that might affect the decision making of the user.

For example:- If the auditor feels that there is a material uncertainty regarding the company's ability to continue as a Going concern for a reasonable period of time, then the auditor might consider it appropriate to mention it in an Emphasis of Matter paragraph.

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