What is a qualified report?
A)A report stating that the auditors are not qualified to report on a firm.
B)A report that states the financial statements are in violation of GAAP.
C)A report that states that departures from GAAP exist in the firm's financial statements.
D)A report that states the financial statements are presented fairly, in all material respects, and are in conformity with GAAP.

Question

Quizplus · Accepted Answer

A qualified report is a report issued by auditors when there are departures from GAAP in the financial statements. This means that the financial statements are not in complete conformity with GAAP but are still seen as reliable. A qualified report is different from an unqualified report, which states that the financial statements are presented fairly and are in conformity with GAAP. A qualified report can negatively affect an organization's reputation and ability to access capital.

What Is a Qualified Report