Which statement about an emphasis of matter paragraph is correct?
Correct answer: D. It highlights a matter properly presented in the financial statements
- A. It always changes an unmodified opinion to an adverse opinion
- B. It is used whenever the auditor lacks independence
- C. It replaces the auditor’s basis for opinion paragraph
- D. It highlights a matter properly presented in the financial statements
Explanation
An emphasis of matter paragraph draws attention to an important matter already properly presented or disclosed in the financial statements. It does not by itself modify the audit opinion or cure a lack of independence.
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About Auditing
Auditing examines accounting records and financial statements to determine whether they present a reliable and fairly stated position. The subject covers audit objectives, internal controls, audit evidence, materiality, vouching, verification, working papers, auditor independence, audit reports, and the distinction between an audit and accounting or investigation.
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