Audit opinions:-
The audit opinion is that part of the auditor's report to the members of an entity in which the auditor expresses an opinion on the extent to which the financial statements are materially misstated.
The fact that it is an opinion, and not a certification, is meant to indicate to financial statement users that the auditor is providing reasonable assurance, and not complete assurance, as to whether or not the financial statements are materially misstated.
Different type of Audit opinions:-
01. An unqualified audit opinion
This opinion arises where the auditor concludes that:
(i) the financial statements have been prepared
using appropriate accounting
policies which have been consistently applied.
(ii) the financial statement have been prepared
in accordance with relevant
legislation, regulations or applicable financial reporting framework, and
(iii) there is adequate disclosure of all
information relevant to the proper
understanding of the financial statements.
Modified Audit Opinions
02. Qualified Opinions
A qualified opinion is issued when either of the following circumstances exist:
There is a limitation on the scope of the
auditor’s examination, or
The auditor disagrees with the treatment or disclosure of a matter in the
financial statements, and in either case
In the auditor’s judgement the effect of the matter is or may be material
to the financial statements and therefore those financial statement may not or
do not show a true and fair view presentation.
03. Adverse Opinion
An adverse opinion is issued when the
effect of a disagreement is so material or pervasive that the auditor concludes
that the financial statements are seriously misleading.
An adverse opinion is expressed by stating that the financial statements do not
show a true and fair view presentation.
04.Disclaimer of opinion
A disclaimer of opinion is expressed when the possible effect of a
limitation on scope is so material or pervasive that the auditor have not been
able to obtain sufficient evidence and accordingly is unable to express an
opinion on the financial statements.
Where the auditor concludes that the possible effect of the limitation is not so significant as to require a disclaimer, the auditor issues a qualified opinion by stating that the financial statements give a true and fair view except for the effects of any adjustments that might have been found necessary had the limitation not affected the evidence available to them.