Types of Audit Reports and Opinions That You Should Know

Subscribing to UAE audit firms can be a definite advantage to any company. With a trusted auditing firm on their side, they can be sure that reports are authentic and thoroughly verified and all discrepancies can be spotted, validated, and be improved moving forward.

The auditor will tediously and rigorously go through all the numbers and documents. At the end of their audit, they will submit their reports. They will definitely explain everything to a letter but it would be best to have prior knowledge of the terms and types of reports or “opinion” that they will present to you.

 

  • Unqualified opinion

Unqualified opinion, as negative as it sounds, denotes to a clean opinion. Meaning there are no misrepresentations done on reports submitted, financial or otherwise. It could also mean that the reports are following the Generally Accepted Accounting Principles or GAAP. This is the best report that a company can received from an auditing team since it would pertain that the records are clean to a T.  Usually, the auditor summarizes his findings in a paragraph and signed it along with his details.

 

  • Qualified opinion

A qualified report is considered a positive report but in a different way.  There are some financial reports that are not following the GAAP standards but upon audit and checking, the auditors find no misrepresentations or discrepancies in the reports. This falls into qualified opinion. Although the report is good as cleared, the auditors would include the reason for such findings and why is it not considered as qualified.

 

  • Adverse opinion

If unqualified opinion is the best, then consider adverse opinion as the worst audit report a business owner can get. An adverse opinion report can mean a lot of things but all of them are negative. For one, it can be because the result of the audit points to a number of fraudulent figures or data being presented in the report or there are gross misrepresentation that are committed by the personnel or team that created the report. Auditors usually include suggestions on their findings, but the primary recommendations is to review the report, correct the misrepresentations and conduct another audit for the report to be acceptable.

 

  • Disclaimer of opinion

A disclaimer of opinion report pertains to situations where the auditor is not able to finish the audit due to different reasons. For one, the lack of documents provided by the company or the accounting team. The auditor will simply states that the result is inconclusive and would merit completion once all documents are submitted for audit.

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