An adverse opinion is issued when the auditor believes
A) some parts of the financial statements are materially misstated or misleading.
B) the financial statements would be found to be materially misstated if an investigation were performed.
C) the auditor is not independent.
D) the overall financial statements are so materially misstated that they do not present fairly the financial position or results of operations and cash flows in conformity with GAAP.

Question

Quizplus · Accepted Answer

An adverse opinion is issued when the overall financial statements are so materially misstated that they do not present fairly the financial position or results of operations and cash flows in conformity with GAAP. This is the most severe type of audit opinion and suggests serious problems with the company's financial reporting.

An Adverse Opinion Is Issued When the Auditor Believes