Pure Services Limited is into the litigation relating to some legal action initiated by the industry regulator. The matter has reached…

(a) (i) When the auditor includes an Emphasis of Matter (EOM) paragraph in the auditor's report, the auditor shall:- (a) include the paragraph within a separate section of the auditor's report with an appropriate heading that includes the term "Emphasis of Matter" (b) include in the paragraph a clear reference to the matter being emphasized and to where relevant disclosures that fully describe the matter can be found in the financial statements. The paragraph shall refer only to information presented or disclosed in the financial statements and (c) indicate that the auditor's opinion is not modified in respect of the matter emphasized. (ii) Examples of circumstances where the auditor may consider it necessary to include an Emphasis of Matter (EOM) paragraph are: An uncertainty relating to the future outcome of exceptional litigation or regulatory action.A significant subsequent event that occurs between the date of the financial statements and the date of the auditor's report.Early application (where permitted) of a new accounting standard that has a material effect on the financial statements.A major catastrophe that has had, or continues to have, a significant effect on the entity's financial position.