Auditing and Attestation - Certified Public Accountant (CPA) 2025 – 400 Free Practice Questions to Pass the Exam

An emphasis-of-matter paragraph is used in an audit report to draw attention to a significant matter that is disclosed in the financial statements, which is necessary for the users to understand the financial statements. However, some situations require the auditor to consider whether to include such a paragraph based on the circumstances.

When a client has changed accountants, this situation does not by itself necessitate the auditor to include an emphasis-of-matter paragraph. The change of accountants does not inherently reflect on the fairness of the current year's financial statements or any significant concerns regarding the financial reporting. While it is important for the new auditor to assess any issues that may have led to the change and to ensure all relevant disclosures are made, simply changing accountants is a routine event in the life of a business and does not require specific action in the context of emphasis-of-matter.

In contrast, when the current financial statements are substandard, significant post-report events occur, or there are existing qualifications from prior years, those situations represent significant concerns that warrant the auditor's attention and should lead to an emphasis-of-matter to inform users appropriately.

Thus, the situation of a client changing accountants is not a trigger for an emphasis-of-matter paragraph, making it the correct answer in this context.