An Accountant’s Opinion, also called an Auditor’s Opinion, is a formal document signed by a certified accountant after a review of a company’s books.
Companies may be required to have an audit from an independent and unbiased third-party accountant, perhaps annually before a report to shareholders or the submission of financial documents to regulatory bodies or lending institutions.
At the conclusion of a review or audit, the auditor issues an Accountant’s Opinion (or Auditor’s Opinion) letter. The two outcomes that are most common: Qualified or Unqualified.
Unqualified means that everything seems in-order, that the financial information the company has presented seems correct and in-line with GAAP.
Qualified means that they auditor cannot agree with all of the methods used by the company’s internal accountants, since a small number of the calculations appear to be misstated or do not adhere to GAAP.
It could also be that the auditor could not access all of the records that pertained to the audit. If a qualified opinion is issued, the auditor will list the specific reasons for this opinion. A Qualified opinion is somewhat of an endorsement nevertheless, since the opinion is to the effect that despite some small oversights, the financial condition of the company is accurately represented overall.
There are also two more outcomes: an Adverse Opinion, and a Disclaimer.
An Adverse Opinion means that the auditor found that the company’s records deviated a significant amount from GAAP (Generally Accepted Accounting Principles), and that their financial statements are not accurate.
A Disclaimer of Opinion means that the auditor cannot ascertain the financial status of the company based on the information he or she has been given or because the company appears to be in an uncertain state.