Learn something new today 📌 Types of Audit Opinions The International Standards on Auditing (ISAs) provide guidelines for auditors to express an opinion on an entity’s financial statements. Audit opinions fall into two (2) main categories: Unmodified (Clean) Opinion and Modified Opinions (which include Qualified, Adverse, and Disclaimer of Opinion). 1️⃣ Unmodified Opinion •Issued when the financial statements are free from material misstatements and prepared in accordance with the applicable financial reporting framework. •The auditor concludes that the financial statements present a true and fair view. 2️⃣ Modified Opinions If the auditor identifies material misstatements or limitations in obtaining sufficient audit evidence, a modified opinion is issued. These include: 📌 Qualified Opinion •Issued when the financial statements are materially misstated or when there is a limitation in obtaining audit evidence, but the impact is not pervasive. •The auditor states that, except for the identified issue, the financial statements are fairly presented. 📌 Adverse Opinion •Issued when the misstatements are both material and pervasive, resulting in financial statements that do not provide a true and fair view. •The auditor concludes that the financial statements are fundamentally misstated and unreliable. 📌 Disclaimer of Opinion •Issued when the auditor is unable to obtain sufficient and appropriate audit evidence to form an opinion, and the possible effects are both material and pervasive. •The auditor does not express an opinion due to the inability to conclude on the financial statements.