In one of the recent CA Final Audit papers, an MCQ asked how a particular situation should be reported. The correct answer was an Other Matter Paragraph. Nothing unusual about that — except that the situation was not discussed anywhere in the ICAI study module. I went looking for the source and found it sitting in the explanatory material of SA 250.

That is the whole problem with EMPs and OMPs. They are not a topic. They are scattered across a dozen different Standards on Auditing, one or two lines at a time, and half of them are never highlighted in the module at all. So students learn SA 706, feel confident, and then get asked about SA 250 or SA 540 or SRE 2410.

This page fixes that. Every situation across every standard where an Emphasis of Matter Paragraph or an Other Matter Paragraph is required — on one page, in one place, with the logic that tells you which of the two goes where. Read it once and you will crack the MCQs and the case studies both.

Watch it, or read it — your choice

If you would rather listen than read, here is the full 15-minute walkthrough:

If you would rather read, everything from the video is written out below — the master table, every standard one by one, and the traps that decide marks. Nothing is held back for the video.

First, the one rule that decides EMP or OMP

Before you memorise a single situation, get this straight. Under SA 706 (Revised), the difference between the two paragraphs comes down to a single question:

Is the matter already presented or disclosed in the financial statements?
If yes → Emphasis of Matter Paragraph (EMP).
If no → Other Matter Paragraph (OMP).

Said another way:

• EMP improves the user’s understanding of the financial statements. The matter is in the notes; the auditor is only pointing at it because it is fundamental.
• OMP improves the user’s understanding of the audit, the auditor’s responsibilities or the auditor’s report. The matter is not in the financial statements at all.

Neither paragraph is a modification. The opinion stays clean unless something else modifies it. Both simply draw attention.

The pattern that repeats everywhere

Once you start reading the situations below, you will notice the same story again and again: the auditor gets squeezed by law or regulation. He wants to withdraw and cannot. He wants a proper framework and the law has forced a bad one on him. The law tells him to say things in his report that he has already said elsewhere. Every time he is restricted and has no way out, he highlights that discomfort — through an EMP if the fact sits in the financial statements, through an OMP if it does not.

Understand that pattern and you will not need to memorise the list. You will be able to derive it.

The master table — every EMP and OMP across the standards

Standard by standard, with the reasoning

SA 210 — when the law forces a bad framework on you

SA 210 deals with preconditions for an audit. One of them is that the applicable financial reporting framework must be acceptable. Sometimes it is not — and you have no choice, because law, rules or regulations prescribe it. This happens in government entities and defence entities, where confidentiality restrictions produce a framework that would otherwise be unacceptable.

You cannot refuse the audit. So you tell management to give additional disclosures in the notes to accounts so the financial statements are not misleading, and you agree in the terms of engagement that you will include an Emphasis of Matter Paragraph drawing attention to those disclosures. The matter is in the financial statements, so EMP — not OMP. This cross-reference sits in SA 706 and is barely visible in the module.

SA 250 — the one that was actually asked

Read this one twice. Every condition matters:

1. There is a non-compliance with law.
2. It has no material effect on the financial statements.
3. But the circumstances are exceptional — management knows, management is involved, management refuses to correct it. Trust has broken down.
4. The auditor therefore wants to withdraw.
5. And withdrawal is prohibited by law or regulation.

So he completes the audit, gives his opinion — and puts an Other Matter Paragraph explaining that he was unable to withdraw. It is an OMP and not an EMP because the fact is nowhere in the financial statements; it is a fact about the audit.

This is the situation that came up as an MCQ, sourced from the explanatory material of the standard rather than the study module. It is exactly why reading only the module is not enough for this topic.

SA 299 — joint auditors who disagree

When joint auditors cannot agree, they issue separate audit reports. Each report must carry an OMP referring to the other joint auditor’s report, so a reader who picks up one report knows the other exists and reads both. Pure common sense, and easy marks if it appears.

SA 540 — estimation uncertainty, and the KAM trap

Sometimes an accounting estimate carries very high estimation uncertainty — the probability of a different outcome is high and the amount involved is large. Users need to know, so you may include an EMP.

But here is the trap. If, in the auditor’s professional judgement, that estimate was a matter of most significance in the audit, it becomes a Key Audit Matter — and then it stays in the KAM section. You do not also put an EMP. So the answer is conditional: KAM if it qualifies as one, EMP if it does not. Examiners love this fork.

SA 560 — two separate situations, do not mix them up

Situation one — restricting the amendment. The audit report has been issued. New facts come to light that would have changed the opinion. Management agrees to prepare revised financial statements and you agree to issue a revised report. But management then also makes other amendments — a change of accounting policy, a change of estimate — which you never asked for and do not wish to re-audit. You may restrict your procedures to the subsequent-event amendment alone. Two mechanisms communicate that: dual dating (the original report date plus the later date for the amendment) and an EMP or OMP. In practice you can use both.

Situation two — revision after public issue. If the original financial statements and report had already gone out to the public and are now being revised, readers who already have the old version need an explanation. That goes in an EMP or OMP. If the revision happened before anything was issued publicly, no such paragraph is needed — nobody outside has seen the old version.

In both situations the EMP-versus-OMP choice is decided by the same rule as always: if management has explained it in the notes to accounts, EMP; if not, OMP.

SA 570 — when the alternative basis of accounting is used

If the going concern assumption is inappropriate and management refuses to accept it, you go straight to an adverse opinion. That much everyone knows.

But if management accepts it and redraws assets and liabilities on a liquidation basis — the alternative basis of accounting — that is a perfectly proper thing to do. It is also a highly unusual way to prepare accounts, and it is fundamental to a user’s understanding of the financial statements. So you include an EMP highlighting it.

Remember the split: to improve understanding of the financial statements, EMP. To improve understanding of the audit procedures, OMP.

SA 705 — the disclaimer that comes with an OMP

Management imposes a limitation on scope after the audit has been accepted, refuses to remove it, and the possible effect is pervasive. The standard tells you to consider withdrawing. If the audit is at an early stage, withdraw. If it is too late, or withdrawal is impracticable — a statutory audit, a government entity, a mandatory audit — you issue a disclaimer of opinion because of the lack of evidence.

And alongside the disclaimer you may add an OMP recording that you were prevented from withdrawing. Again: the pain of being restricted by law, communicated through an Other Matter Paragraph.

SA 706 — the home standard

SA 706 lists the classic EMP examples: an uncertainty relating to exceptional litigation or regulatory action; a significant subsequent event occurring between the balance sheet date and the report date; early application of a new accounting standard that makes the financial statements look different from everyone else’s; a major catastrophe with a significant effect on financial position.

On the OMP side, SA 706 carries three that the module does not emphasise:

• The SA 260 link. Under SA 260 you already communicate the planned scope and timing of the audit, and significant risks, to those charged with governance. Sometimes law additionally requires you to explain the planning, scope and timing in the report itself. That goes in an OMP. Note that significant risks usually end up in the KAM section anyway, so they do not need repeating in the OMP.
• Elaboration of responsibilities. Where law or an auditing standard requires further elaboration of the auditor’s responsibilities beyond what SA 700 already describes, explain it in an OMP.
• More than one set of financial statements. Where the same entity’s accounts are signed under two frameworks — AS and Ind AS, or Ind AS and IFRS — an OMP highlights that both reports exist.

Plus the well-known one: where the report is intended only for the board, the audit committee or specific financiers, an OMP headed Restriction on Distribution and Use.

SA 710 — comparatives, where three of them live

SA 710 is dense with these, especially under the comparative financial statements approach where an opinion is given on more than one year.

• Predecessor auditor. If the prior period was audited by someone else, an OMP states that, the type of opinion issued, the reasons if it was modified, and the date of that report.
• Change in your own opinion. If your current opinion on the prior period differs from the one you issued earlier, an OMP discloses the change and the reasons for it.
• Rectification of a prior period misstatement. If a prior period error is found and management corrects it, you give a clean report — but the correction is significant enough to be highlighted, so an EMP is appropriate. Had management refused, the opinion would have been modified instead.

SA 800 — special purpose framework, and the only merger

When financial statements are prepared under a special purpose framework, the very basis of preparation is different from a general purpose set, so users must be told. That is an EMP under the heading Basis of Accounting, explaining that the statements are prepared under a special purpose framework.

Very often you also want to restrict distribution and use — which is normally an OMP. SA 800 makes a unique concession here: because the two matters are connected, they may be combined into one paragraph headed Basis of Accounting and Restriction on Distribution and Use. This is the only place in the standards where an EMP and an OMP are merged, which makes it a very natural MCQ.

SRE 2400 and SRE 2410 — EMPs exist in reviews too

Students assume EMPs and OMPs belong only to audits. They do not. Almost everything from the Standards on Auditing carries across into review engagements — conceptually identical, just without the SA references.

• SRE 2400. An EMP to draw attention to a matter in the financial statements, including the basis of accounting where special purpose statements are being reviewed and use is to be restricted; an OMP to explain review-related matters.
• SRE 2410. An interim review where a material uncertainty related to going concern exists. Note the difference carefully: revised SA 570 requires a separate section headed Material Uncertainty Related to Going Concern. SRE 2410 has not been revised in line with it and still asks for an EMP. That gap between the two is exactly the kind of thing an examiner picks up.

How to actually remember this

Do not go for verbatim rote learning. This whole list is derivable if you hold three things in your head:

1. In the financial statements → EMP. Not in the financial statements → OMP.
2. Understanding of the financial statements → EMP. Understanding of the audit → OMP.
3. Whenever the auditor is squeezed by law and cannot escape, he highlights it — SA 210, SA 250, SA 705 and the SA 706 OMPs are all the same story in different clothes.

Visualise the situation, reason it out, arrive at the answer yourself, and only then worry about the exact words. Read this page once and it takes about half an hour. Read it again in the last day and a half before the exam and it takes ten minutes.

Where to take this next

• All free CA Final Audit resources in one place — planners, marathons, question lists, chart revisions: tinyurl.com/CAFinalAllinOne
• ABC Analysis, chapter-wise and SA-wise weightage — on the Telegram channel
• 176 most important concepts from the past 6 RTPs and 12 MTPs — here
• CA Final doubt-solving group — t.me/cafinalravitaori
• Soft copies of the FADU Chart Book, PARAM Question Bank, Titanium Concept Book and MCQ Book — on Drive
• Doing the same standard-by-standard sweep for CA Inter? Start with every SA with its objective and memory shortcut.

For question practice on exactly these situations, the PARAM Question Bank and MCQ Book combo carries the full set of reporting questions, and the FADU Chart Book has these as charts you can revise in minutes. If you want the concepts and all 600 questions discussed together, that is the Exam Oriented Batch.

Frequently asked questions

What is the basic difference between an Emphasis of Matter Paragraph and an Other Matter Paragraph?

An Emphasis of Matter Paragraph draws attention to a matter that is already presented or disclosed in the financial statements and is fundamental to users’ understanding of them. An Other Matter Paragraph deals with a matter that is not presented or disclosed in the financial statements but is relevant to users’ understanding of the audit, the auditor’s responsibilities or the auditor’s report. Neither is a modification of the opinion.

Does an EMP or an OMP modify the audit opinion?

No. Both paragraphs are used when the auditor has already concluded that the opinion is not modified in respect of that matter. They only draw attention. If a matter would require a qualification, adverse opinion or disclaimer, an EMP is not a substitute for it.

If a matter is a Key Audit Matter, should an EMP also be given?

No. Where a matter has been determined to be a Key Audit Matter, it is reported in the Key Audit Matters section and is not also reported as an Emphasis of Matter. Under SA 540, for example, high estimation uncertainty in an accounting estimate goes into the KAM section if it qualifies as a Key Audit Matter, and only otherwise into an EMP.

Which standard allows an EMP and an OMP to be combined?

SA 800. When special purpose financial statements are reported on, the Basis of Accounting Emphasis of Matter Paragraph and the Restriction on Distribution and Use Other Matter Paragraph deal with connected matters, and may be presented as a single paragraph headed Basis of Accounting and Restriction on Distribution and Use.

Do Emphasis of Matter Paragraphs apply to review engagements as well as audits?

Yes. SRE 2400 permits Emphasis of Matter and Other Matter Paragraphs in review reports on the same logic as in audit reports, without referring to the Standards on Auditing. SRE 2410 requires an Emphasis of Matter Paragraph where a material uncertainty related to going concern exists in an interim review, because it has not been revised in line with revised SA 570, which instead requires a separate section.

Why do EMPs and OMPs come up so often in CA Final MCQs?

Because they sit across a dozen standards rather than in a single chapter, and several of them appear only in the explanatory material of the standard rather than in the study module. That makes them ideal for a two-mark MCQ that separates students who read only the module from those who read the standards.

Anything in this list that is not clicking, ask it in the CA Final group and it will get answered.

This post is CA Ravi Taori’s explanation of what the Standards on Auditing require, as they stand in August 2026. Always confirm the position against ICAI’s own pronouncements and the latest announcements for your attempt before relying on it in the exam.

Mast raho. Smart padho. — CA Ravi Taori