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

Law prescribes a financial reporting framework for Deccan Infra Ltd that the auditor, CS Arvind Rao, determines would otherwise be unacceptable. He decides an Emphasis of Matter paragraph about the framework is needed and also that an Other Matter paragraph is relevant to all his responsibilities and to users' understanding of the report. Which placement pair is consistent with SA 706 (Revised)?

The Emphasis of Matter goes immediately after the Basis of Opinion section to give context to the opinion, while the Other Matter, being relevant to all the auditor's responsibilities, may be a separate section following the Report on the Audit of the Financial Statements and the Report on Other Legal and Regulatory Requirements.

  1. AEOM at the very end of the report; Other Matter inside the Opinion section
  2. BEOM immediately following the Basis of Opinion section for context; Other Matter as a separate section after the Report on the Audit of the Financial Statements and the Report on Other Legal and Regulatory RequirementsCorrect
  3. CEOM only inside Key Audit Matters; Other Matter before the Opinion section
  4. DEOM in the Report on Other Legal and Regulatory Requirements; Other Matter immediately after Basis of Opinion

Explanation

SA 706 (Revised) says an EOM on the reporting framework may be placed immediately after the Basis of Opinion section to give context to the opinion. An Other Matter relevant to all the auditor's responsibilities may be a separate section after the two main report sections. The other pairs reverse or invent placements.

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