The inclusion of an emphasis of matter paragraph doesn’t mean that the auditor has found anything wrong. The auditor simply wants to draw the readers’ attention to something that’s important. Audit have previously described an emphasis-of-matter paragraph as the auditor’s way of calling out “Hey, reader! Make sure you take a note of this.”
For every territorial local authority, the auditor has included an emphasis of matter paragraph in the audit report to draw readers’ attention to the council’s own disclosures about the proposed three waters reform. Although councils have prepared their consultation document as if these services will continue to be provided by the council, future decisions might result insignificant changes. However, because no decisions have yet been made, councils simply don’t have the information available to present anything but the status quo.
A number of emphasis of matter paragraphs have also drawn readers’ attention to the delivery of capital expenditure programmes. For those, the auditor has gained assurance that the council’s forecast programme can reasonably be delivered. However, there is still a high degree of uncertainty because of matters like the availability of contractors and suppliers, and what other councils and organisations might be planning. The audit report on a council’s consultation document might include other emphasis of matter paragraphs for other reasons.