Question

What are the different types of an audit report that an auditor can issue? Choose a type of opinion, other than unmodified/unqualified, and explain a condition that may lead to that opinion.

Answer 1

There are 4 types of audit report an auditor can issue as follows:

1. Unqualified/Unmodified opinion-Clean report
2. Qualified opinion-Qualified report
3. Disclaimer of opinion-Disclaimer report
4. Adverse opinion-Adverse audit report

Explanation of Disclaimer of Opinion:

When an auditor issues a disclaimer of opinion report, it means that they are distancing themselves from providing any opinion at all related to the financial statements.

Example: Where management refuses to provide auditors the supporting documents for certain transactions or balances such as management refuses to provide payroll list to auditors, for they concern on the confidential or other matters.

The disclaimer of opinion is usually the most serious type of audit opinion, comparing to other modified opinions such as qualified opinion and adverse opinion because auditors in their opinion states that they are ‘unable to form an opinion’.