What is the Other Matter Paragraph? (Explained)


The Audit Report is designed to provide a detailed explanation of the matters disclosed within the audit report, after a review of financial statements. It has numerous components.

Other Matter paragraphs are additional paragraphs that can be added by the auditor in its report in the case where the auditor thinks it is important to draw the attention of users in addition to matter that is already disclosed in the financial statements.

As a matter of fact, it can be seen that this is an aspect the auditor realizes that this particular matter should be brought to the attention of the stakeholders, and it is not explicitly mentioned in the financial statements.

Therefore, it is about the matter except for the one that is mentioned in the financial statements but should be brought to the knowledge of the users of the financial statements, under the heading of Other Matter Paragraphs.


Other Matter Paragraph can be referred to as a paragraph that is included in the auditor’s report that sheds light on matters over and above what is disclosed in the financial statements.

The underlying premise of using this particular information is that it would be relevant to the users in their understanding of the audit, or the auditor’s report.

The Other Matter paragraph is mostly added to the auditor’s report after the opinion paragraph, and any other emphasis of the matter paragraph. This means, that the matter is mainly disclosed in the following sequence, opinion paragraph, emphasis of matter paragraph, and finally other matter paragraphs.

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Other Information

Other Matter Paragraph is only is mostly placed in another place in the auditor’s report. It is mostly included within the ‘other reporting responsibilities’ paragraph if it directly relates to the auditor’s other reporting responsibilities.

However, it should also be considered that such a paragraph is supposed to be added only if the relevant laws permit such an inclusion. Otherwise, it cannot be included in the report itself.

Additionally, it should also be taken into account that the other matter paragraph is not supposed to qualify or modify the auditor’s opinion.

Situations where the Other Matter paragraph can be added

The Other Matter Paragraph can only be included in the financial statements in the following circumstances.

  • In the case where non-compliance is identified by the auditors. Additionally, those who are charged with governance are not taking remedial actions against such financial statements. In such cases, the auditor is often not allowed to withdraw from the audit itself, as a result of which the alternate course of action is to disclose this in the other matters paragraph.
  • Other Matter paragraphs can also be added in the case where there has been an amended report issued after finding out subsequent events. Additionally, it can also be the case where the management has strictly prohibited any amendment changes in financial statements, whereas the inherent law does not prohibit the company from making any such change.
  • In the same manner, in situations where the auditor is unable to withdraw from the audit process itself because of the limited scope of work, and the restrictions places on the audit process himself. Therefore, this can be seen that in cases like these, Other Matter paragraph is utilized to show why withdrawal was not possible from the audit itself.
  • In the case where the financial statements are prepared for a different purpose, and a different user group. In such cases, it is imperative that the users are able to realize the fact that the financial statements were not prepared for the general use of the public, but were prepared for a specific category. Therefore, it is mandatory to inform the users of the financial statement, and that is mostly done with the help of Other Matter paragraphs.
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Therefore, it can be seen that the Other Matter Paragraph is mostly prepared for the cases where the auditors think it is necessary to highlight a matter other than the matter already presented or disclosed.

In the same manner, it is only included on the basis of the judgment of the auditor and does not necessarily have to be included under all circumstances. The main premise behind this is to clarify the user’s understanding of the audit, the auditor’s responsibilities, and the auditor’s report. 

The conditions under which Other Matter Paragraph should ideally be included in the case where the information in the financial statement itself does not suffice to provide explanations.

Without this paragraph, the decision-making criteria of the financial statement users might be impacted, because of which it is rudimentary to disclose this particular information in the form of an Other Matter Paragraph within the Audit Report.