Qualified opinion

Qualified Opinion

An auditor’s judgment that the financial statements are fairly presented in all material respects except for the effects of a specific matter, indicating a significant but not pervasive issue that doesn’t invalidate the statements as a whole.

For example, an auditor might issue a qualified opinion stating: “In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements present fairly, in all material respects, the financial position of Company X…”

Qualifications typically arise from scope limitations (inability to gather sufficient appropriate evidence about specific accounts) or departures from applicable accounting standards. The audit report clearly explains the qualification’s nature, reasons, and financial effects when practicable. Using “except for” language signals to users that financial statements are reliable overall but have a specific problem area. Qualifications occupy a middle ground between unqualified opinions (no significant issues) and adverse opinions (financial statements as a whole are not fairly presented), providing a nuanced message about financial statement reliability.