Financial Reporting &
Analysis
Audit Opinion / Qualification
What is an audit opinion?
An audit opinion is expressed on audited statements. It is required
that an auditor state in the opinion that generally accepted accounting
principles have been followed that they have been applied on a basis consistent
with that used the preceding year.
Types of Audit Opinions
Unqualified opinion — The unqualified opinion has no reservations
concerning the financial statements. This is also known as a clean opinion
meaning that the financial statements appear to be presented fairly.
Qualified opinion / “Except for” — This means that the auditor has
taken exception to certain current-period accounting applications or is unable
to establish the potential outcome of a material uncertainty as a going concern.
Disclaimer opinion — This is a special type of audit report that should
be issued when the auditor permits his or her name to be associated with
financial statements that were not examined in accordance with generally
accepted auditing standards. Sometime due to
inablility to express opinion or pervasive uncertainty.
Adverse opinion — This is a type of audit opinion which states that the
financial statements have material effect on fair presentation of the financial position, results of operations,
and changes in financial position, in conformity with generally accepted
accounting principles.
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