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Hi , if PBT is £10m and there was a lawsuit against the company for £5m , the case will not be resolved before audit report signing and therefore a contingent liability is correctly disclosed.
So for impact this will be a Key audit matter rather than Emphasis of matter paragraph right ? (as materiality is 50% and and is a significant item)
Since the KAM paragraph has been added , can you give me some examples of things that will be added in EOMP
KAM and EOM are not mutually exclusive and both can refer to the same event in the same audit report.
It seems to me that many EOM matters are also likely to be relevant to the KAM. For example, a key audit matter could be reviewing the going concern position of the company and that would be a classic EOM paragraph too if going concern were in doubt. However, there can be events that only need EOM.
For example, a fire burns down the factory after year end. That is of no consequence to the results for the year, but there would be an EOM drawing attention to a note disclosing this non-adjusting post period-end event.
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