In a qualified opinion, the auditor states that, except for a specific matter, the financial statements are presented fairly. The "basis for qualified opinion" section explains the matter and, where possible, its financial effect.
Typical examples: being unable to obtain sufficient evidence on the valuation of an investment in an associate, or no provision for severance pay having been recognised at all. A qualified opinion is scrutinised carefully by lenders and investors, so it is important for companies to make adjustments in good time during the audit.
Source: BDS 705
Related terms
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.Adverse opinionThe opinion in which the auditor states that the financial statements are not presented fairly, where misstatements are both material and 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.MaterialityA misstatement being large enough, individually or together with others, to influence the economic decisions of users of the financial statements.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.
Last updated: October 22, 2026 · This definition is for general information only.