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What are the four major categories of independent auditor's opinions
From the point of view of the audited company or organization, the unqualified opinion is the best possible audit outcome, and it is by far the most frequently reported opinion (the other opinions below are rarely reported, at least for audits on financial reports from publicly listed companies). When presented by a third party (external) auditor, the report assures the public that the auditor has examined the financial reports and is of the opinion that the financial information is presented fairly and in conformance with Generally Accepted Accounting Principles (GAAP).
A qualified opinion means the auditor found the financial reports essentially in conformance with Generally Accepted Accounting Principles, except for one or a few areas where the auditor cannot, or does not want to, assert conformance. The qualification may come about because
When an auditor issues a qualified opinion, the specific reasons for the qualification will be stated.
An adverse opinion means the auditor has concluded that the audited financial statements do not fairly represent the organization's financial position or financial performance, and that there are significant departures from GAAP. In most cases, before publishing an adverse opinion, the auditor advises the organization's accountants and officers of the problems and works with them to correct the financial reporting situation, so that an opinion can be published that is either unqualified or qualified (1 and 2 above), rather than adverse.
When an auditor issues an adverse opinion, the report will specifically state the reasons for the opinion (specific misstatements or other departures from GAAP). An adverse opinion will almost certainly result in rejection of the organization's financial reports by the investment community, lending institutions, regulatory bodies, and governments.
The auditor may issue a disclaimer of opinion, that is, publicly report that the auditor has chosen not to issue an opinion. This may occur when
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The categories are as follows.
clean or unqualified opinion, qualified opinion, reverse opinion, disclaimer of opinion which have no opinion
1. Unqualified opinion
2. Qualified opinion
3. Adverse opinion
★ A modified opinion could be:
1. Aqualified opinion:: the auditor concludes that, except for specific matters explained in the audit report, the financial statements give a true and fair view;
2. Anadverse opinion: the auditorconcludes that the financial statements do not give a true and fair view;
3. Adisclaimer of opinion: the auditor concludes that the extent of their inability to obtain sufficient appropriate audit evidence is such that it is not possible to form an opinion on the financial statements.
★ The unmodified fourth opinion:
4. Unqualified opinion.
I can only fully agree with previous answers.
1. Unqualified Opinion
2. Qualified Opinion
3. Adverse Opinion 4. Disclaimer of Opinion
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