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I find it a bit confusing to distinguish between the two.
Other matter paragraph is used when there is a modified report with an unmodified opinion.The OM paragraph encapsulate matters that are not presented in f/s which the auditor decides necessary to communicate.
Other information paragraph deals with documents and reports contained in annual report and f/s but are not necessarily subject to audit.
Where either one of these paragraphs present issues relating to material misstatements e.g inconistency of the chairman’s report with financial statements(O/infor), this should be positioned beow the Basis of Opinion paragraph .In other words they take precedence over KAM (ISA701) paragraph in this case.
Is this correct Mike?
Have you read this technical article?
Please read it (again, if appropriate) and if there’s still confusion, post again
yes Mike I clearly understand that. Especially KAM which are those matters usually communicated to those charged with governance due to their significance and gravity of risk- for listed companies of course.
Other Matters
-the matters in the auditor judgement are very significant and must be communicated accordingly to the users.They are not presented anywhere in the f/s.For example the auditor has failed to withdraw from the engagement because of law and regulations.
*if the discosures are appropriate but the significance of the matter need the auditor to draw users` attention, an emphasis of matter paragraph( or matters relating to going concern) is used below the basis of opinion e.g a pending litigation which has potential material impact on the going concern asumption and is appropriately disclosed.
Other information
-the auditor does not not express an opinion on this information but has responsibility to test its consistency with f/s.For example the chairmans report, annual report,employee report etc.If there are material inconsistencies in these documnets ,and after discussing with mgnt and those charged with governance with no resolution crystallising the auditor need to report the material misstatements under other information paragraph below the basis of opinionNot really Mike.The contrast I gave among the three matters above was to try and see if I am not confusing these issues.My question remains that , when there are material inconsistencies in other reports the auditor has the resposnsibility to report them under Other Information paragraph if management or those charged with governance do not resolve the matter.The standard says , the auditor reprots these material inconsistencies below the Basis of Opinion paragraph.Does this mean that this paragraph is positioned before KAM?Also since the auditor does not express an opinion on other information, does this mean that material inconsistencies therein do not warranty any modification?
Thanks Mike.
“Does this mean that this paragraph is positioned before KAM?”
I believe that I’m correct in saying that the standard doesn’t specify whether this paragraph should be before or after KAM
“…does this mean that material inconsistencies therein do not warranty any modification?”
No, the inclusion of a paragraph about material inconsistencies is itself a modification. But it’s not a qualification of the audit opinion
Better?
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