Emphasis of Matter Paragraph in an Auditor’s Report

If an auditor considers it necessary to draw users’ attention to a matter presented or disclosed in the financial statements that, in the auditor’s judgment, is of such importance that it is fundamental to users’ understanding of the financial statements, the auditor shall include an Emphasis of Matter paragraph in the auditor’s report provided the auditor has obtained sufficient appropriate audit evidence that the matter is not materially misstated in the financial statements. Such a paragraph shall refer only to information presented or disclosed in the financial statements.

When an auditor includes an Emphasis of Matter paragraph in the auditor’s report, the auditor shall:

1. Include it immediately after the Opinion on Financial Statements paragraph in the auditor’s report;
2. Use the heading “Emphasis of Matter,” or other appropriate heading;
3. Include in the paragraph a clear reference to the matter being emphasized and to where relevant disclosures that fully describe the matter can be found in the financial statements; and
4. Indicate that the auditor’s opinion is not modified in respect of the matter emphasized.

The inclusion of an Emphasis of Matter paragraph in an auditor’s report does not affect the auditor’s opinion. An Emphasis of Matter paragraph is not a substitute for either:

1. The auditor expressing a qualified opinion or an adverse opinion, or disclaiming an opinion, when required by the circumstances of a specific audit engagement; or
2. Disclosures in the financial statements that the applicable financial reporting framework requires management to make