ACCA Advanced Audit and Assurance (AAA) Practice Exam

What is the purpose of an other matter paragraph in an auditor's report?

1. To present the financial statements

2. To refer to a matter relevant to users' understanding of the audit

3. To provide an opinion on the financial statements

4. To summarize the audit findings

The correct answer is: To refer to a matter relevant to users' understanding of the audit

The purpose of an other matter paragraph in an auditor's report is to refer to a matter that is relevant to users' understanding of the audit and the auditor's responsibilities. This paragraph is used to communicate information that does not affect the auditor's opinion on the financial statements but is important for the readers to be aware of. For instance, it can include information about the audit scope, regulatory compliance issues, or significant uncertainties that could affect how the financial statements should be interpreted. In the context of an auditor's report, this paragraph enhances the transparency of the audit process and helps stakeholders grasp any context or nuances that could influence their understanding of the financial statements. By including such information, the auditor provides a more complete picture than would be conveyed by the opinion itself alone. References to the financial statements or summaries of audit findings do not fall under the other matter paragraph; they are typically addressed in different sections of the auditor's report. The core opinion on the financial statements remains distinct and firmly situated in its own section, separate from this additional explanatory content.