An auditor's opinion is a certification that accompanies financial
statements based on an audit of the accountant's
opinion of the procedures and records used to produce the
statements regardless of whether material misstatements exist in the financial
statements. There are generally four types of audit opinions rendered
in accounting.
Unqualified Opinion
An unqualified
opinion is also call as a clean opinion. An
unqualified opinion is an audit report that is issued when an auditor
determines that each of the financial records provided by the organization is
free of any misrepresentations. In addition, an unqualified opinion indicates
that the financial records have been maintained in accordance with the
standards known as Generally Accepted Accounting Principles (GAAP). This is the
best type of report a business can receive. Typically, an unqualified report
consists of a title that includes the word “independent.” This is done to
illustrate that it was prepared by an unbiased third party.
Qualified
Opinion
A qualified opinion is given when
a company’s financial records have not been presented in accordance with GAAP but no misrepresentations are identified, an auditor will issue a
qualified opinion. The writing of a qualified opinion is extremely similar to
that of an unqualified opinion. A qualified opinion, however, will include an
additional paragraph that highlights the reason why the audit report is not
unqualified.
Disclaimer
Opinion
On some situation, an auditor is unable to complete an accurate audit
report because of a variety of reasons, such as an
absence of appropriate financial records. When this happens, the auditor issues
a disclaimer of opinion, stating that an opinion of the firm’s financial status
could not be determined. A disclaimer of opinion is not an
opinion itself.
Adverse
Opinion
A
disclaimer of opinion means that due to a significant scope limitation, the
auditors were unable to form an opinion or did not form an opinion on the
financial statements. An adverse opinion
indicates financial records are not in accordance to GAAP and are grossly
misstated. An adverse opinion is an indicator of fraud, and public entities
that receive an adverse opinion are forced to correct their financial
statements and have the financial statements re-audited.
References
http://yourbusiness.azcentral.com/types-audit-opinions-rendered-accounting-3557.html
http://www.investopedia.com/terms/a/auditors-opinion.asp
An auditor's opinion is a certification that accompanies financial
statements based on an audit of the accountant's
opinion of the procedures and records used to produce the
statements regardless of whether material misstatements exist in the financial
statements. There are generally four types of audit opinions rendered
in accounting.
Unqualified Opinion
Qualified Opinion
Disclaimer Opinion
Adverse Opinion