In particular in relation to significant qualitative

in particular in relation to significant qualitative aspects of the entity’s accounting
practices, and significant difficulties encountered during the audit. (Paragraphs
62–64 provide further discussion of the impediments to the auditor providing
additional information about the audited financial statements or the audit).
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Users believe there would
be value in more pertinent
information in the auditor’s
report about the financial
statements and the audit.
35
36
37
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The Framework for Achieving the Objective of Auditor Commentary
Based on the value cited by users, the IAASB is of the view that the auditor could
provide additional information to users tailored to the facts and circumstances of
the entity, in a discrete and prominent section of the auditor’s report that would
be referred to as Auditor Commentary. The overarching objective of such a new
Auditor Commentary section in the auditor’s report is to provide transparency
about matters that are, in the auditor’s judgment, likely to be most important to
users’ understanding of the audited financial statements or the audit.
Without modifying the auditor’s opinion, ISAs currently require, or otherwise allow,
the auditor to include additional information in the auditor’s report to draw users’
attention to, in the auditor’s judgment:
(a) Matters, although appropriately presented or disclosed in the financial
statements, that are of such importance that they are fundamental to users’
understanding of the financial statements (referred to as “Emphasis of Matter”
paragraphs); and
(b) Any other matters that are relevant to users’ understanding of the audit, the
auditor’s responsibilities or the auditor’s report (referred to as “Other Matter”
paragraphs).
Within the ISAs, there are specific circumstances for which Emphasis of Matter
or Other Matter paragraphs are required.
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Beyond those requirements, however,
auditors are not explicitly required to consider whether these paragraphs should
be included in the auditor’s report. Rather, ISA 706
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essentially gives the auditor
a mechanism by which to do so when considered necessary in the context of the
particular engagement.
Except where the auditor is required to include such paragraphs, their use in
practice is rare – in fact, the ISAs note that a widespread use of Emphasis
of Matter paragraphs may diminish the effectiveness of the auditor’s
communication of such matters. However, users of the auditor’s report have
expressed a view that these paragraphs are useful at directing their attention
to what is most important within the financial statements or about the audit
thereon.
The new concept of Auditor Commentary is consistent with the existing concepts
of Emphasis of Matter and Other Matter paragraphs. However, to better meet the
information needs of users, Auditor Commentary builds upon these concepts by:
J Lowering of the threshold for auditors to draw attention to certain matters