ACCA AA · Chapter 13 · Question 8 of 12
Which of the following best describes when an Emphasis of Matter paragraph is used under ISA 706?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) To draw attention to a matter appropriately presented or disclosed in the financial statements that is fundamental to users' understanding of them
Explanation
An Emphasis of Matter paragraph refers to a matter already properly presented or disclosed that is fundamental to understanding, such as a significant uncertainty over litigation or a major catastrophe. An Other Matter paragraph deals with matters not in the financial statements. Reasons for modification go in the Basis for Opinion section, and matters of most significance are key audit matters.
More Misstatements and the auditor's report MCQs
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