[inviteyou]

I am trying to get my head around loss contingencies as they relate to the Emphasis of Matter and Other Matter paragraphs. If the company had a copyright infringement, a loan guarantee, or penalty that would be classified as a required note disclosure because it was considered probable or reasonably possible, does it “automatically” mean that this will be called out in the Audit Report under Other Matter or Emphasis of Matter? In other words, do all loss contingencies need to be in the Audit Report under an EOM or OM paragraph?

[TheeAccountant]

It’s up to auditor judgment. Typically if the auditor thinks it’s very important they will add the paragraph. What you need to know for the exam is that EOM has to do with F/S and OM is everything else.

[Author]

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