As per SA 706 EOM is a paragraph included in auditors report that relates to the matters appropriately presented or disclosed in the financial statement and in auditors’ judgement is of importance for users of financial statements. Examples where it is necessary to include EOM paragraph – An uncertainty relating to the future outcome of exceptional litigation or regulatory action, a significant subsequent event that occurs between the date of the financial statements and the date of the auditor’s report.
An emphasis of matter paragraph does not modify the audit opinion. Such a paragraph is also not a substitute for expressing a qualified or adverse opinion, or for disclaiming an opinion, where they are appropriate. It is instead used to draw the reader’s attention to a specific matter relating to the audit.
