Difference Between The Emphasis Of Matter Paragraph And Other Matter Paragraph

The emphasis of the matter paragraph and the other matter paragraph are regulated by international standards on auditing (ISA) 706




Meaning Of The Emphasis Of Matter Paragraph

this is the paragraph that is included in the auditor report that refers to the matter appropriately presented or disclosed in the financial statements, that in auditors judgment is of such importance that it needs to be communicated to the users of the financial statement

in other words, the emphasis of the matter paragraph is the paragraph added by an auditor in his report in which the auditor repeats the matter that management has already correctly stated in the financial statement.




The auditor shall do the following when he includes the emphasis of matter paragraph in the auditor’s report

  • it will be set in a separate section of the auditor’s report
  • the auditor should use appropriate heading to refer to the other matter paragraph including using the term ’emphasis of matter’
  • auditor should in the emphasis of matter paragraph a clear reference to the matter being emphasized and to where relevant disclosure that fully describes the matter can be found in the financial statement
  • he should indicate that the auditor’s opinion is not modified in respect of the matter emphasized

the matter emphasized in the emphasis of matter paragraph must not be:




  • requiring modification as per ISA 705; or
  • determined to be key audit matter which need to be communicated in auditors report
  • the inclusion of emphasis of matter paragraph in the auditor’s report does not affect the auditor’s opinion.

an emphasis of the matter is not substituted for either;

  • the auditors expressing a modified audit opinion
  • disclosure in the financial statement that the applicable financial reporting framework requires management to make
  • reporting in the accordance with ISA 570 when material uncertainty exist relating to events or conditions that may cast significant doubt on the entity’s ability to operate as going concern




example of circumstances that may lead to the inclusion of the emphasis of matter paragraph in the auditor’s report

  • the existence of material uncertainty relating to the event or the condition that may cast significant doubt on the entity’s ability to continue as going concern but has appropriately disclosed
  • a major catastrophe that has had, or continues to have a significant effect on the entity’s financial position
  • uncertainty relating to the future outcome of exceptional litigation or regulatory action
  • early application (where permitted) of new accounting standard, that have pervasive effect on the financial statements in advance of its effective date

the other matter paragraph




this is the paragraph that is included in the auditor report that refers to the matter other than those presented or disclosed in the financial statements that, in auditors, judgement is relevant to the user’s understanding of the audit, the auditor’s responsibilities or the auditors report

the auditor is allowed to use the other matter paragraph where

  • it is not prohibited by laws or regulations, and
  • the matter has not been determined as a key audit matter to be communicated in the auditor’s report as per ISA 701




the content of the other matter paragraphs reflects clearly that such matters are not required to be presented and disclosed in the financial statements.

the other matter paragraph does not include information the auditor is prohibited from providing by law, regulation, or other professional standards, for example, ethical standards related to confidentiality

other matter paragraph does not include information that is required to be provided by the management

example of circumstances that may lead to the inclusion of the other matter paragraph in the auditor’s report




  • any matter which in the auditor’s opinion is relevant to the users understanding of the auditor’s responsibilities or auditors report
  • when there is a restriction on the distribution or use of audit report
  • when the auditor is required to report on more than one set of financial statement
  • when the auditor can not withdraw from engagement even though the possible effect of the limitation of scope imposed by management is pervasive




  • any matter that in the auditor’s opinion is relevant to the user’s understanding of the audit