Implications for auditor’s report and audit completion

Generally up to 1½ marks for each point discussed:

– Review adequacy of note 
– Evaluate its compliance with applicable financial reporting requirements

If note is adequate:

– No modification of auditor’s opinion
– Emphasis of Matter paragraph to be included (up to 3 marks for discussion of its contents and positioning) 
– Discuss use of EOM with those charged with governance

If note is not adequate:

– Non-compliance with financial reporting requirements therefore material misstatement
– Auditor’s judgement as to whether misstatement is material or pervasive
– Content of Basis of Opinion paragraph
– Discuss modification of opinion with those charged with governance

Maximum marks 6