CFA Level I · CFA Level I Exam · Introduction to Financial Statement Analysis
An analyst reads an auditor's report that states the financial statements present fairly, in all material respects, the company's position in accordance with IFRS. The analyst should most appropriately conclude that the opinion is:
The statement is an unqualified opinion, which provides reasonable assurance that the statements are free of material misstatement. It is not absolute assurance or a guarantee against fraud, and it does not signal a qualified opinion, which would cite specific exceptions or scope limitations.
- Aa guarantee that no fraud or misstatement exists
- Ban unqualified opinion providing reasonable assurance, not absolute assuranceCorrect
- Ca qualified opinion indicating a scope limitation
Explanation
Fair presentation in all material respects is an unqualified (clean) opinion. It gives reasonable assurance only, so it does not guarantee absence of fraud. A qualified opinion would mention exceptions or limitations.
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