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CS Professional · Compliance Management, Audit and Due Diligence · Forming an Opinion and Reporting

An auditor of Dhruv Infra Ltd includes an Emphasis of Matter paragraph relating to the applicable financial reporting framework, including a case where the framework prescribed by law would otherwise be unacceptable. The auditor wants the paragraph to give proper context to the opinion. Where may the auditor consider placing it?

The auditor may consider placing it immediately following the Basis of Opinion section. SA 706 (Revised) indicates this placement for an Emphasis of Matter paragraph relating to the applicable financial reporting framework, because it gives appropriate context to the auditor's opinion.

  1. AImmediately following the Basis of Opinion sectionCorrect
  2. BAs a separate section after the Report on Other Legal and Regulatory Requirements
  3. CWithin the Key Audit Matters section as one of the matters
  4. DBefore the Opinion section, replacing the opinion heading

Explanation

SA 706 (Revised) states that when an Emphasis of Matter paragraph relates to the applicable financial reporting framework, the auditor may consider it necessary to place it immediately following the Basis of Opinion section to provide appropriate context to the opinion. The separate section after other reporting is the placement for an Other Matter paragraph relevant to all responsibilities.

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