Share on Facebook Share on Twitter Email
Answers.com

Adverse Opinion

 
opinion expressed by a company’s independent auditors that the firm’s financial statements do not accurately reflect the company’s current financial position or operating results. An adverse opinion is a far more serious finding than a Qualified Opinion, in which only some issues are of concern to the auditor.
Investors should be extremely cautious about investing in any company with an adverse opinion from its auditors.

Previous:Advanced Funded Pension Plan, Advanced Detection System (ADS) Financial Industry Regulatory Authority (finra)
Next:Adverse Selection, Advisory Account
Search unanswered questions...
Enter a question here...
Search: All sources Community Q&A Reference topics

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. Adverse opinions are usually given after an auditor's report, which can be internal or independent of the company.

Investopedia Says:
Adverse opinions are not a good thing for companies because it implies wrongdoing. An adverse opinion is a red flag for investors and can have major negative effects on stock prices. Auditors will usually give a red flag if the financial statements are significantly different from generally accepted accounting principals (GAAP).

Related Links:
Learn what it means to do your homework on a company's performance and reporting practices before investing. Advanced Financial Statement Analysis
Discover how to keep score of companies to increase your chances of choosing a winner. What You Need To Know About Financial Statements
Learn about this warning sign and how to spot it in a company's financial statements. Red Flag Phrases: "Material Adverse Effect"
Look past analysts' ratings to find winning stocks for your clients. Research Report Red Flags
These income statement red flags may not spell a company's downfall. Learn why here. The One-Time Expense Warning
Learn this easy-to-understand technique of analyzing a company's financial statements and reports. Introduction To Fundamental Analysis


 
 

 

Copyrights:

Barron's Finance & Investment Dictionary. Dictionary of Finance and Investment Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.  Read more
Investopedia Financial Dictionary. Copyright ©2010, Investopedia.com - Owned and Operated by Investopedia US, A Division of ValueClick, Inc. All rights reserved.  Read more

Follow us
Facebook Twitter
YouTube