qualified audit report
- An auditors' report in which some qualification of the financial statements is required because (a) the auditor feels there is a limitation on the scope of the audit examination or (b) the auditor disagrees with the treatment or disclosure of a matter in the financial statements. The type of qualification used will depend upon the degree of materiality of the limitation or disagreement. If the limitation of scope is very material, a disclaimer of opinion will be issued; if it is less material the ‘except for the limitation of scope’ form of qualification will be issued in the report (see except for). If the auditor disagrees with the accounting treatment or disclosure in the financial statements and feels the effect is material and potentially misleading, an adverse opinion will be expressed. If the disagreement is not so material, a qualified opinion will be given using the ‘except for the effects of the disagreement’ form of qualification.
Accounting dictionary. 2014.
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