The emphasis of matter paragraphs


The emphasis of Matter paragraph is mainly used when the auditor considers it necessary to draw the attention towards a matter that has been presented or subsequently disclosed in the financial report that, pertaining to the auditor’s opinion, is something that is of fundamental importance and therefore, should ideally be disclosed to the users, as a part of ensuring that they are able to get a fundamental understanding of the financial report.

Therefore, the emphasis of matter paragraph is included to ensure that the auditor’s information, which he has obtained from the results of the audit evidence, is disclosed to the general public for their further perusal.

As a matter of fact, it can further be seen that the underlying premises pertaining to Emphasis of Matter paragraphs ensure that the auditor is able to disclose that the matter is not materially misstated in the financial report.

The emphasis of Matter Paragraph is mainly drafted by orders as an optional exercise to highlight and subsequently explain matter pertaining to the financial statements, which might not be under proper clarity on their own.

It is supposed to include the underlying issue at hand, as well as other related accounting standards and concepts that apply to the matter at hand. These are not necessarily red flags but might also include matters that might influence the end decision taken by the decision-makers.


Such a paragraph is mainly intended to ensure that the information that the context of the report only includes information that is presented or disclosed in the financial report.

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As per the Auditing Standards, the auditor is required to include the Emphasis of Matter paragraph in the auditor’s report, where required, in line with the other Auditing Standards.

In the cases where the auditor is able to include an Emphasis of Matter paragraph in the auditor’s report, it can be seen that the following aspects should be included within the report.

Firstly, it should be included immediately after the Opinion paragraph in the auditor’s report. It also requires usages of proper heading “Emphasis of Matter,” or any other appropriate heading in this regard.

Additionally, a clear reference to the matter that is being emphasized or brought to notice should also be included in the financial report.

Relevant disclosures that entirely describe the matter that is inherently found in the financial report should also be included in order to clarify the scope of the process.

Lastly, there is a need to further mention explicitly that the auditor’s opinion is not modified in the light of the matter emphasized in this regard.

The Emphasis of Matter Paragraph is also supposed to include any additional disclosures that should ideally be included in the Emphasis of Matter paragraph, in order to provide the stakeholders with proper clarity regarding the relevant accounting standards that have been used, as well as the underlying opinion on that matter, under the accounting standards that is relevant in this regard.

The main rationale that is used to reflect the Emphasis of Matter paragraph is based on the premise that there is a need to include such disclosures, and in the absence of the existing additional disclosures, the users are likely to be misled about the evaluative decision making pertaining to scare resources.


Therefore, this acts as a justification behind the Emphasis of Matter paragraph, because it shows that the additional disclosures are meant to serve as relevant and reliable information that can be presented in a manner to treat the financial report as a comparable as well as understandable meaning to establish a proper understanding of the financial report.


Therefore, as a conclusion of the information that has been presented above, it can be seen that Emphasis of Matter can be regarded as a paragraph that is included in the auditor’s report that is required by the Auditing Standards.

As a matter of fact, it is supposed to be included at the auditor’s discretion. This also refers to a matter that is appropriately presented and subsequently disclosed in the financial statements.

 This matter, as per auditor’s professional judgment, is based on the importance that it is fundamentally important to develop a basic understanding for the stakeholders to be able to understand the financial statements in a better manner.

The Emphasis of Matter paragraph is considered as a step to ensure that stakeholders are able to analyze matters that require proper understanding and disclosure for issues that might not otherwise be understood with proper clarity.