Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

Why is it important for financial statements to receive an unqualified auditor’s opinion?

user-image
Question added by Mohamed El Machichi , Purchase Manager , Berkat Madinah Trading Sdn.Bhd
Date Posted: 2013/06/22
Kokab Rahman
by Kokab Rahman , Managing Director, Head of Business Development , Radeya Business Services http://www.radeya.biz

An unqualified auditor's opinion means that the financial statements are reliable and that the firm isn't in trouble.
It is important to get this designation in order to get the trust of users of financial statements such as creditors and investors and to keep the share price high.
Otherwise, it will be difficult for the company to get further investments and loans and current investors may also start selling their shares, thus resulting in a decline of share price.

AYMAN EL KASHLAN
by AYMAN EL KASHLAN , ACCOUNTS MANGER , MODERN OFFICE FOR POULTERY

BECAUSE IT MEANS THAT IT CAN BE RIELY ON MAKING DISSION AND FREE OF MATRAIL MISTAKES

Jeziel Embodo
by Jeziel Embodo , Municipal Accountant , Local Government Unit of Padada

Because an unqualified opinion is issued when the independent auditor believes with reasonable assurance that the company's financial statements are sound; that is, the statements are free from material misstatements and can be relied upon.

Ghulam Mustafa
by Ghulam Mustafa , Finance Manager , Al Hamli Group of Companies

An unqualified opinion is important for financial statements because, independent auditor believes that the company's financial statements are sound; that is, the statements are free from material misstatements.
This is different from a qualified opinion which is issued when the independent auditor discovers something in the financial statements that is subject to major concern.

Farhan uddin Khilji
by Farhan uddin Khilji , Head of Internal Audit , ABV Rock Group Co. Ltd.

Unqualified opinion shows that the financial statements reflect a "true and fair view".

The statement of Mr Kokab Rahman (with all due respect) is not altogether correct as a company might get an unqualified audit report by disclosing and accounting for its correct financial position and all the transactions fairly in the financial statements, even if it is in a worst financial trouble, its share price is at extremely low or if the bankers/creditors have refused to extend loan/credit to the Company. 

(Farhan - senior manager audit Ernst & Young)

Do you need help in adding the right keywords to your CV? Let our CV writing experts help you.