Explain the use of the emphasis of matter and other matter paragraphs in the audit report in accordance with relevant auditing standards.?

Sure. The emphasis of matter (EOM) and other matter (OM) paragraphs are used in the audit report to draw users' attention to matters that are important to their understanding of the financial statements, but that do not affect the auditor's opinion on the financial statements.

The EOM paragraph is used to emphasize a matter that is appropriately presented or disclosed in the financial statements, but that the auditor believes is of such importance that it is fundamental to users' understanding of the financial statements. For example, the auditor may use an EOM paragraph to emphasize a significant accounting policy or a key uncertainty.

The OM paragraph is used to draw users' attention to a matter other than those presented or disclosed in the financial statements, but that the auditor believes is relevant to their understanding of the audit, the auditor's responsibilities, or the auditor's report. For example, the auditor may use an OM paragraph to disclose a going concern issue or a material weakness in internal control.

The use of EOM and OM paragraphs is covered by the following auditing standards:

• International Standard on Auditing (ISA) 706, Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor's Report
• Statements on Auditing Standards (SAS) 706, Emphasis-of-Matter Paragraphs and Other-Matter Paragraphs in the Independent Auditor's Report

The auditor should use professional judgment to decide whether to include an EOM or OM paragraph in the audit report. The auditor should also consider the following factors when making this decision:

• The significance of the matter to users' understanding of the financial statements
• The likelihood that users will not otherwise be aware of the matter
• The auditor's responsibility to communicate information that is relevant to users' understanding of the audit, the auditor's responsibilities, or the auditor's report

The EOM and OM paragraphs should be included in the audit report immediately after the opinion paragraph. The paragraphs should be numbered consecutively, and should be titled "Emphasis of Matter" or "Other Matter". The paragraphs should also include a clear reference to the matter being emphasized or disclosed.

The use of EOM and OM paragraphs can help to ensure that users of the financial statements have a complete understanding of the financial statements and the audit.