Month End Glossary

Qualified Opinion

A Qualified Opinion is a type of audit opinion issued by an auditor when they conclude that, except for certain issues, the financial statements provide a true and fair view in accordance with the applicable financial reporting framework.

A Qualified Opinion is issued by an auditor when there is a limitation of scope or a deviation from generally accepted accounting principles, yet the overall financial statements are still fairly presented, except for the effects of these certain qualifications. For instance, if an auditor is unable to obtain sufficient evidence regarding inventory valuation but the rest of the audited areas are accurate, they may issue a Qualified Opinion.

This type of opinion indicates to users of the financial statements that while most of the company’s financial data is accurate, caution is advised when considering the specific areas mentioned in the qualification. It emphasizes transparency in financial reporting and helps stakeholders make informed decisions.

Example in use: "The company's auditor issued a Qualified Opinion for the fiscal year, citing limitations in verifying the completeness of accounts receivables as the only qualification." This shows how an auditor conveys an opinion that, aside from certain impediments, the financial statements are reliable.

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