Understanding Audit Opinions

An auditor's report contains their opinion on the financial statements. There are four main types: 1. Unqualified (Unmodified): This is a "clean" opinion. The auditor concludes the financial statements are presented fairly, in all material respects. 2. Qualified: This is issued when a misstatement is material, but *not* pervasive to the financial statements. The auditor states that *except for* a specific issue, the statements are fair. 3. Adverse: This is the worst opinion. It's issued when a misstatement is both material and *pervasive*. The auditor states the financial statements are *not* presented fairly. 4. Disclaimer: This is issued when the auditor is *unable* to obtain sufficient appropriate audit evidence. The auditor does not express an opinion at all.