Audit opinion
Audit opinion: the auditor's published conclusion on a company's accounts — unmodified, qualified, adverse, or a disclaimer — stating whether they give a true and fair view.
FrameworkISA 700
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A company with total assets of €10,000,000 sets materiality at 1%, or €100,000. Its auditor finds inventory overstated by €150,000, above materiality but confined to one balance, so the opinion is qualified. A similarly sized error spread across inventory, receivables and revenue instead would make it adverse; too little evidence to reach any view at all makes it a disclaimer; finding nothing material makes it unmodified.
Where it fits
SubjectFinancial AccountingAdvancedTopicThe Financial StatementsAdvanced