Audit Opinion

An audit is an objective examination and evaluation of the financial statements of an organization to make sure that the records are a fair and accurate representation of the transaction they claim to represent.

Qualified opinion
A qualified audit opinion is one in which there is some scope limitation or exception to accounting standards.Exceptions are described in the audit report with additional explanatory paragraphs so that the analyst can determine the importance of the excaption.

Unqualified opinion
An unqualified audit opinion states that the financial statements give a “true and fair view”(international) or are “fairly presented”(international and US)in accordance with applicable accounting standards.This is often reffered to as a “clean” opinion and is the one that analysts would like to see in a financial reprot.

Adverse opinion
An adverse audit opinion is issued when an auditor determines that the financial statements materially depart from accounting standards and are not fairly presented.An adverse opinion makes analysis of the financial statments easy:Do not bother analyzing these statements,because the company’s financial statements cannot be relied on.

Disclaimer of opinion
A disclaimer of opinion occurs when,for some reason,such as a scope limitation,the auditors are unable to issue an opinion.