An Auditor’s opinion is presented in the audit report. This opinion is established after the independent examination of the financial statements of the entity, after acquiring sufficient and appropriate audit evidence and conducting audit procedures. An Audit opinion can be of 3 types:
1) Unqualified Opinion – An unqualified opinion reflects that the financial statement of the entity is true and fair. The auditor was able to obtain sufficient and appropriate audit evidence and not material misstatement was found in the books.
2) Qualified Opinion – A qualified opinion is issued when the auditor finds a material misstatement, however it not pervasive. It is a misstatement found in any one particular aspect, and hence the books of accounts are true and fair, subject to conditions.
3) Adverse Opinion – An adverse opinion indicates significant problems in the books of the entity, in which case the financial statements are not true and fair.
Another possible opinion is the disclaimer of opinion, in which case the Auditor was not able to obtain sufficient and appropriate audit evidence either because the management refused to provide it or prevented the auditor from accessing any information.