how a qualified opinion is represented
a qualified opinion is listed in the third and final section of an auditor s report the first section of the report outlines management s responsibilities in regard to preparing the financial statements and maintaining internal controls the second section outlines the auditor s responsibilities in the third section an opinion is given by the independent auditor regarding the company s internal controls and accounting records the opinion may be unqualified qualified adverse or a disclaimer of opinion a qualified opinion states that the financial statements of a corporate client are with the exception of a specified area fairly presented auditors typically qualify the auditor s report with a statement such as except for the following when they have insufficient information to verify certain aspects of the transactions and reports being audited a qualified opinion is not so severe that it indicates that a business is doing poorly or that a company has hidden or falsified information but rather that the auditor simply cannot give an issue free report the auditor may specify that they believe the overall audit to be true and factual but will specify the area that they believe is the issue qualified opinion vs other opinionsa qualified opinion is a reflection of the auditor s inability to give an unqualified or clean audit opinion an unqualified opinion is issued if the financial statements are presumed to be free from material misstatements it is the most common type of auditor s opinion if the issues discovered during the audit result in material misstatements that would affect the decision making of the financial statement users the opinion is escalated to an adverse opinion the adverse opinion results in the company needing to restate and complete another audit of its financial statements a qualified opinion is still acceptable to most lenders creditors and investors if the auditor is unable to complete the audit report due to the absence of financial records or insufficient cooperation from management the auditor issues a disclaimer of opinion this is an indication that no opinion over the financial statements was able to be determined 