SA 706

Question 1

EOM Para

Answer 1

• included in AR
• matter appropriately presented & disclosed
• fundamental to user’s understanding of FS

Question 2

Other Matter Para

Answer 2

• included in AR
• matters other than those presented/disclosed
• user’s understanding of :
  - audit
  - auditor’s responsibility
  - AR

Question 3

SA’s contain specific requirement to include in EOM

Answer 3

• FRF prescribed by law/reg -unacceptable but for the fact it is prescribed (SA 210)
• Alert - users - spcl purpose framework (SA 800)
• facts become known after AR - amended AR (SA 560)

Question 4

Egs of circumstances - auditor consider to include EOM

Answer 4

• uncertainty - future outcome - litigation or regulatory action
• significant subsequent event - date of FS to AR
• early app of new a/c std - material effect on FS
• major catastrophe - significant effect on FS

2 pts - after FS (litigation & subsequent event);

2 pts - before FS ( A/c std & catastrophe)

Question 5

Considerations when including EOM

Answer 5

• seperate para with approp. heading
• clear ref to matter being emphasized & where it is found in FS
• Indicate - opinion is not modified

Question 6

OM Para considerations

Answer 6

• not prohibitedd by law / reg
• When SA 701 applies, not determined KAM

Question 7

EOM Para is not a substitute for

Answer 7

• modified opinion SA 705
• Disclosures in FS
• SA 570 reporting

Already discussed before