# Other Matter (OM) Paragraph – SA 706

## What is an OM Para?

An OM Para includes matters other than those presented or disclosed in the Financial Statements that the auditor includes in the audit report.

Purpose: To provide better understanding of:

The audit itself
The audit report
The auditor's responsibilities

## EOM Para vs. OM Para – Critical Distinction

Feature	EOM Para	OM Para
Matter location	IN the FS	NOT IN the FS
Purpose	User understanding of FS	Understanding of audit / report / auditor responsibility

## Common Examples of OM Para

Example 1 – Predecessor Auditor:

Previous year's audit was conducted by a different (predecessor) auditor. Current auditor includes this fact in an OM Para.

Example 2 – Joint Audit (SA 299):

XLtd was audited jointly by CA Saksham (Firm) and CA Abhishek (Firm).

The common audit report includes an OM Para stating:

> "This audit was conducted jointly by CA Saksham Jani & CA Abhishek."

## Structure of Independent Audit Report (SA 706 Paragraphs)

1. EOM Para → Matters already in FS, fundamental for user understanding

2. OM Para → Matters not in FS, for understanding the audit/report/auditor's role

Worked example

### Example 1

Scenario: XLtd was audited last year by CA Sharma. This year CA Verma is appointed. → Answer: CA Verma may include an OM Para in his audit report mentioning that the prior year FS were audited by a different auditor (CA Sharma), since this fact is not in the FS but helps users understand the audit.

### Example 2

Scenario: XLtd is jointly audited by CA Saksham & CA Abhishek. What should their common audit report contain? → Answer: The common audit report should include an OM Para disclosing the joint audit arrangement and naming both firms — e.g., 'Joint Audit conducted by CA Saksham Jani & CA Abhishek.' This is consistent with SA 299 read with SA 706.

⚠️ Common exam mistakes

Treating OM Para as EOM Para — EOM Para is for matters IN the FS; OM Para is for matters NOT in the FS.
Including matters already disclosed in the FS in an OM Para — such matters belong in EOM Para.
Thinking OM Para provides a separate opinion on the matter — like EOM Para, OM Para does NOT involve any separate or modified opinion.
Forgetting that joint audit must be disclosed via OM Para in the common audit report.

Reference:

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