Adverse Opinion

A professional opinion made by an auditor indicating that a company's financial statements are misrepresented, misstated, and do not accurately reflect its financial performance and health.

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This is not a good thing for companies. When auditors have completed their investigation as an adverse opinion it implies wrongdoing.

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Learn what it means to do your homework on a company's performance and reporting practices before investing. Advanced Financial Statement Analysis

Term used when an auditor reports that the company's financial statements do not present fairly the financial position, results of operations, or changes in financial position or are not in conformity with Gaap. The auditor must provide the reasons for the adverse opinion in the Audit Report. An adverse opinion is rare and usually results when the CPA has been unable to convince the client to amend the financial statements so that they reflect the auditor's estimate about the outcome of future events or so that they otherwise adhere to GAAP. See also Unqualified Opinion.