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

The auditor of Himalaya Pharma Ltd, in a report with an unmodified opinion, wants to highlight that Note 14 describes the effects of a fire at the company's plant, which is fundamental to users' understanding. Which presentation is consistent with the SA 706 (Revised) illustration?

The auditor uses an Emphasis of Matter paragraph that draws attention to Note 14 and states the opinion is not modified in respect of the matter. This follows the SA 706 (Revised) illustration for a fire. Key audit matters give no separate opinion.

  1. AAn Emphasis of Matter paragraph drawing attention to Note 14 and stating that the opinion is not modified in respect of the matterCorrect
  2. BA qualified opinion paragraph stating that the fire invalidates the statements
  3. CA Key Audit Matters paragraph giving a separate opinion on the fire
  4. DAn Other Matter paragraph stating that another auditor audited the prior year

Explanation

The SA 706 illustration draws attention to a note describing a fire's effects and says 'Our opinion is not modified in respect of this matter.' A Key Audit Matters section gives no separate opinion on matters, and Other Matter paragraphs deal with matters not presented in the statements, such as a predecessor auditor.

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