An adverse opinion is the opposite of an unqualified opinion. An adverse opinion is issued when the auditor believes that the financial statements contain material misstatements and do not present the financial statements fairly. Adverse opinions result from material departures from Generally Accepted Accounting Principles (GAAP). This is the lowest opinion that can be rendered by an auditor after the course of an audit.
Hierarchy of Opinions:
- Unqualified Opinion
- Qualified Opinion
- Disclaimer of Opinion
- Adverse Opinion