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In the emphasis of matter paragraph , the directors have not decided to disclose eps figure…is it right to include eomp here as this matter is not disclosed or presented in the f/s..where as in eomp all the matters that are appropriatly disclosed are highlighted..will be waiting for the reply..thanks
This is the engagement partner’s proposed audit report!!!!
The question is asking you for a critical appraisal so it’s actually leading you towards recognising the inappropriateness of the Emphasis of Matter paragraph
You are correct – non-disclosure of the omission would rule out the possibility of an EoM
In addition, the question identifies that the reason for non-disclosure is because the directors feel that “the figure is materially distorted” – by the question’s own admission, it’s a material matter! But eps is a material matter anyway and is required to be disclosed (both basic and diluted)
This failure by the directors to disclose should lead to a qualified audit opinion.
It’s not pervasive, but it is certainly material and should lead to an “except for’ qualification
OK?
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