An adverse opinion means the financial statements as a whole are misleading. For example, excluding from consolidation a significant subsidiary that should have been consolidated, or mismeasuring numerous significant account balances, can lead to this conclusion.
Adverse opinions are rare, but when issued they seriously affect the company's financing and investor relations.
Source: BDS 705
Related terms
Qualified opinionThe opinion the auditor expresses when misstatements, or a lack of evidence, are material but not pervasive.Disclaimer of opinionA type of report in which the auditor does not express an opinion because sufficient appropriate audit evidence could not be obtained and the possible effects could be both material and pervasive.Unmodified opinionThe opinion the auditor expresses on concluding that the financial statements are presented, in all material respects, in accordance with the applicable financial reporting framework.Agreed-upon proceduresAn engagement in which the practitioner performs procedures agreed with the entity and, where relevant, a third party, and reports only the findings without providing assurance.Analytical proceduresThe evaluation of financial information through analysis of plausible relationships among financial and non-financial data.Assurance engagementAn engagement providing assurance, against specified criteria, on a subject matter other than an audit or review of historical financial information.
Last updated: October 22, 2026 · This definition is for general information only.