adverse opinion
An external auditor’s opinion that an entity’s financial statements do not conform with *Generally Accepted Accounting Principles, or do not offer a *fair presentation of the entity’s financial position, the results of its operations, or changes in cash flows. Under most systems of *Generally Accepted Auditing Standards, external auditors are obliged to explain the reasons for an adverse opinion, which applies only to *material items that could mislead financial statement users. An adverse external audit opinion can damage a corporation’s public image by sending shock waves through its *stock-holders and the wider investing community. For this reason, adverse opinions are relatively rare for large corporations, and external auditors tend to prefer to persuade an organization’s management to amend financial statements to avoid an adverse opinion. Compare *disclaimer, *qualified opinion, and *unqualified opinion.

Auditor's dictionary. 2014.

Look at other dictionaries:

  • adverse opinion — An accounting term used in connection with the issuance of audited financial statements. An adverse opinion states that the entity s financial statements do not present fairly the financial position, results of operations, and changes in… …   Black's law dictionary

  • adverse opinion — An accounting term used in connection with the issuance of audited financial statements. An adverse opinion states that the entity s financial statements do not present fairly the financial position, results of operations, and changes in… …   Black's law dictionary

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  • adverse opinion — An opinion expressed in an auditors report to the effect that the financial statements do not give a true and fair view of the organization s activities. This situation usually arises when there is a disagreement between the auditor and the… …   Big dictionary of business and management

  • adverse opinion — noun an opinion concerning financial statements (usually based on an audit by a CPA) that the statements as a whole do not present results fairly or are not in conformity with the generally accepted accounting practices of the United States •… …   Useful english dictionary

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  • adverse, averse — Adverse means opposed, contrary, hostile. Averse means reluctant and unwilling and implies a holding back because of distaste or dislike. The employees had an adverse opinion of the company plan. The company treasurer is averse to lending money… …   Dictionary of problem words and expressions

  • opinion — A document prepared by an attorney for his client, embodying his understanding of the law as applicable to a state of facts submitted to him for that purpose; e.g. an opinion of an attorney as to the marketability of a land title as determined… …   Black's law dictionary

  • opinion letter — Letter issued by a certified public accountant to accompany financial statements. The opinion letter has two parts. One describes the scope of the accountant s work in the preparation and testing, if any, related to the preparation of the… …   Financial and business terms

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