ACCA Audit and Assurance (F8) Practice Exam

What is the purpose of an Other Matter paragraph in an audit report?

1. To disclose matters that are immaterial to the financial statements

2. To highlight significant issues not disclosed that are important for user understanding

3. To summarize financial statement findings

4. To give an opinion on the financial statements

The correct answer is: To highlight significant issues not disclosed that are important for user understanding

The purpose of an Other Matter paragraph in an audit report is specifically to highlight significant issues that are not disclosed in the financial statements but are important for users' understanding. This part of the report allows auditors to communicate matters that do not fit into the main body of the audit opinion but may be relevant for the reader to consider in evaluating the financial statements. For instance, there might be situations where significant events or transactions occurred after the balance sheet date that could impact the users’ interpretation of the financial statements. In such cases, including these issues in an Other Matter paragraph ensures that stakeholders are informed about relevant circumstances that may affect their assessment of the company's financial position or results. Other options suggest different functions that do not align with the specific focus of the Other Matter paragraph. Matters that are immaterial to financial statements, summarizing findings, or providing an opinion are handled differently in the audit report structure, and do not capture the essence of what an Other Matter paragraph is intended for.