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CMA Intermediate · Corporate Accounting and Auditing · Audit Report and Reporting under CARO

An auditor's report contains a Key Audit Matters section. The auditor also wishes to add an Emphasis of Matter paragraph about a subsequent event. Which approach is consistent with SA 706 (Revised)?

The paragraph may be placed directly before or after the Key Audit Matters section, based on relative significance, with a heading such as 'Emphasis of Matter – Subsequent Event' to distinguish it from the individual key audit matters. It cannot replace them.

  1. APlace the paragraph directly before or after the Key Audit Matters section, optionally titled 'Emphasis of Matter – Subsequent Event'Correct
  2. BReplace the Key Audit Matters section with the Emphasis of Matter paragraph
  3. CPlace it only after the Report on Other Legal and Regulatory Requirements
  4. DDescribe the key audit matters inside the Emphasis of Matter paragraph instead of a separate section

Explanation

Where a Key Audit Matters section exists, an Emphasis of Matter paragraph may be placed directly before or after it, based on judgment of relative significance. Added context in the heading helps differentiate it from individual key audit matters. An EOM is not a substitute for describing key audit matters.

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