CFA Level I · CFA Level I Exam · Introduction to Financial Statement Analysis
An auditor concludes that the financial statements of a company are free of material misstatement and fairly present its financial position in accordance with IFRS. The auditor's opinion is best described as:
The opinion is unmodified, also called a clean opinion. It says the financial statements are free of material misstatement and fairly presented under IFRS. Qualified and adverse opinions are issued only when material misstatements or other problems are found in the statements.
- Aadverse
- BunmodifiedCorrect
- Cqualified
Explanation
An unmodified (clean) opinion states that the statements are free of material misstatement and present fairly in accordance with the applicable framework. A qualified opinion is issued when misstatements are material but not pervasive, and an adverse opinion when they are material and pervasive.
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