Types of Audit Opinions

Lesson

📖 Click Here for Lesson 📕 Click Here to Hide Lesson

Audits involving looking at financial statements and figuring out if they're reliable.

At the end of an audit, the financials receive one of four types of opinions from the auditor:

Unqualified Opinion - The auditor believes that the financials have been presented fairly. This is the evaluation that investors like the most.
Qualified Opinion - The auditor believes that the financials have been presented fairly, except for one item.
Adverse Opinion - The auditor does not believe that the financials have been presented fairly. This can be catastrophic for the organization being evaluated.
Disclaimer of Opinion - The auditor cannot express an opinion, due to an inability to complete the audit in an impartial manner. In some cases, the disclaimer of opinion may be the result of factors entirely outside of the control of the audited firm.

Question

You've been asked to testify about your audit of Shady corp..

You've been briefed with the following facts:

The financials held up to scrutiny, but the auditors weren't able to verify the inventory of a remote warehouse.

What kind of opinion should be expected?

Answer

📖 Click Here for Answer & How to Solve 📕 Click Here to Hide Answer

👉 Answer:

Qualified opinions are given to financials that are presented fairly with one exception.