What is an Unqualified Opinion?

An unqualified opinion is otherwise known as an unqualified report or a clean report. It is the judgment of an independent auditor about a company which states that the financial records and statements are fairly and accurately presented without any shortcomings. This opinion also shows that a business is in compliance with the generally accepted accounting principles (GAAP). An unqualified opinion or report is the best auditors opinion a business can have, this is also the most common type of auditors report. Auditors examine the internal and external practices of a company before giving this report.

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How is an Unqualified Opinion Used?

If Company ABC hires an independent auditor to assess the financial records and statements of the firm, internal reports and external practices, if after the assessment Company ABC has not misrepresented any of its financial statements and complied with the standards of GAAP, an unqualified report is given by the auditor to reflect this.

Unqualified Opinion vs. Other Opinions

There are different kinds of opinion an auditor can give once an audit process is complete, these include qualified opinion, unqualified opinion, a disclaimer of opinion and adverse opinion. If an auditor gives a qualified opinion, it means that there is a slight issue with the financial reports and statements of a company or whether the accounting policies of the company are not totally compliant with the standards of GAAP. The issue does not necessarily mean that the financial statements of a firm are misrepresented or whether the firm is in chaos, it only shows that the company did not provide sufficient information needed. An unqualified opinion, on the other hand, means there is a fair and appropriate presentation of financial statements by a firm.