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Hello Tutor,
When an auditor finds a material fact that needs to be corrected by amending Financial statements – Management amends the Financial statements, Auditor audits the amendments and then re-issue auditor’s report.
Is this re-issuance of auditors report = amended auditors report and would require an Emphasis of matter paragraph in the auditor’s report?
Thank you.
If the FS/auditor’s report were previously issued – the EoM in the auditor’s report on the later financial will draw attention to the note that explains the amendment – i.e. the subsequent event.
But honestly, this is just a provision that is there “just in case” and is very very very rare in practice.
Consider, for example, that most UK companies must file accounts within 6 months of the reporting date (that’s ignoring COVID extension to 9 months which you can ignore for example purposes). So suppose y/e is 31 Dec 2020. Accounts are issued end of June 2021. A material subsequent event comes to light in July 2021 … by the time it’s investigated it’s at least August. It’s going to have to be something pretty major that requires going back an reissuing last year’s FS/auditor’s report when we’re already 8 months through the next year (!)
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