ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Types of Independent Audit Reports and Opinions

Updated on April 7, 2012
Source

An independent audit report is a document companies receive at the end of a financial audit. The primary purpose of an audit is to assure outside stakeholders that a company follows whatever accounting principles govern its resident country. In most cases, Generally Accepted Accounting Principles or International Financial Reporting Standards are the most common measuring stick for audits. An auditor has the option to give one of four basic audit reports to a company based upon the auditor’s review of the company’s books compared to the set of accounting principles.

An unqualified audit opinion is the best audit report a company can receive. It states that auditors have not found any material misstatements and the company follows governing accounting principles with no exceptions. Most companies receive this audit report. A company may need to undergo a remedial audit, however, to achieve this report if a prior audit contained a different opinion.

The worst audit report a company can receive is one with an adverse opinion. This one can be pretty nasty. It essentially states that a company has at least one – possibly more – areas that do not conform to GAAP or IFRS standards. The departures from GAAP or IFRS may be so severe that they heavily distort a company’s financial statements. In most cases, the audit report will contain a few paragraphs to explain the departures or other misstatements that led to the adverse opinion.

Companies may receive an audit report that falls between the first two opinions, known as a qualified audit opinion. In fact, almost all companies have probably received this opinion at one time. As an accountant for two publicly held companies – with one a Fortune 500 firm – I have seen a few of these audit report types. The qualified opinion states that a company is mostly in compliance with GAAP or IFRS. However, there is at least one issue that auditors see as an error. The error, however, does not indicate a serious problem and may not result in a material misstatement for the company’s financial statements.

A disclaimer of opinion is the final audit report type handed out during an independent audit. This audit report simply states the auditor was unable to complete normal audit procedures on a company’s books. The audit limitation results in an auditor being unable to fully consent – give an unqualified opinion – on a company’s accounting documents and financial statements. In short, this opinion does not carry a positive or negative connotation. It simply means not enough information exists for auditors to state another audit opinion.

working

This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://corp.maven.io/privacy-policy

Show Details
Necessary
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
Features
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Marketing
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Statistics
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)