State and briefly explain the type of paragraph that the auditor should include in the auditor's report in the above circumstances.

As per SA 710 “Comparative Information - Corresponding Figures and Comparative Financial Statements", If the financial statements of the prior period were audited by a predecessor auditor and the auditor is permitted by law or regulation to refer to the predecessor auditor's report on the corresponding figures and decides to do so, the auditor shall include "Other Matter paragraph" in the auditor's report. Other Matter Paragraphs in the Auditor's Report: Other Matter paragraph is a paragraph included in the auditor's report that refers to a matter other than those presented or disclosed in the financial statements that, in the auditor's judgement, is relevant to users' understanding of the audit, the auditor's responsibilities or the auditor's report.