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CFA Level I · CFA Level I Exam · Introduction to Financial Statement Analysis

An auditor issues an unqualified opinion on a company's financial statements. An analyst relying on this opinion is most justified in concluding that the statements:

The analyst can conclude that the statements present fairly, in all material respects, the company's financial position and performance under the applicable standards. This is reasonable, not absolute, assurance; it does not rule out fraud or imply conservative accounting choices.

  1. Aare free from any possibility of fraud
  2. Bpresent fairly, in all material respects, the company's position in accordance with the applicable standardsCorrect
  3. Creflect the most conservative accounting choices available under the standards

Explanation

An unqualified opinion provides reasonable assurance, not absolute assurance, that the statements are free of material misstatement and are fairly presented under the applicable framework. It does not guarantee absence of fraud, and it says nothing about choosing the most conservative policies, since standards allow judgment.

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