Auditor's opinion

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Auditor's opinion

The Definition Of Audit Opinion

            Audit opinion is a statement from the auditor regarding the fairness of the financial statements  in company that auditor has audited  This fairness includes materiality, financial position and cash flows statement . The Auditor

 

There are four types Audit Opinion :

1)   Unqualified Opinion

            After the auditor conducts an audit in accordance with the Auditing Standards on            financial statements and issues an opinion that the auditor has not found any material errors in the overall financial statements or also no deviations from the existence of accounting principles that apply Generally Accepted Accounting Principles (GAAP).

 

2)   Qualified Opinion

            an opinion given at the time of the financial statements is said to be reasonable in   material matters, but there are irregularities or also incomplete at a particular post, so exceptions must be made. From these exceptions that may occur,

             If :

·        The evidence is insufficient

·        There are restrictions in the scope

·       There is an irregularity in the application of generally applicable accounting principles

 

3)   Modified Unqualified Opinion

            After the auditor conducts an audit in accordance with the Auditing Standards on            financial statements and issues an opinion that an opinion is given at a certain time that has no direct effect on the existence of a reasonable opinion. Certain circumstances may occur

            If, as follows:

           

·         Between the 2 accounting periods there is a material change in the application of accounting principles

·         Due to the lack of clear rules, the financial statements are made deviating from the Generally Accepted Accounting Principles (GAAP)

·         The report is influenced by uncertainty of future events or events the results can not be     expected on the date of the audit report.

·         The auditor's opinion is based in part on the opinion of another independent auditor.

·         There are great doubts about the ability of the business unit in maintaining its survival.

 

4)   Adverse Opinion

                 

Opinions given at the time of the report as a whole can occur if the auditor must provide additional paragraphs to be able to explain the abnormalities of a financial statement, which is accompanied by the impact of the resulting abnormality, on an audit report.

 

The worst type of financial report that can be issued to a business is an adverse opinion. This indicates that the firm’s financial records do not conform to GAAP. In addition, the financial records provided by the business have been grossly misrepresented. Although this may occur by error, it is often an indication of fraud. When this type of report is issued, a company must correct its financial statement and have it re-audited, as investors, lenders and other requesting parties will generally not accept it.

 

5)   Disclaimer of opinion

            On some occasions, an auditor is unable to complete an accurate audit report. This may     occur for a variety of reasons, such as an absence of appropriate financial records.When this happens, the auditor issues a disclaimer of opinion, stating that an opinion of  the firm’s financial status could not be determined.


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