Accountant's Opinion

AAA

DEFINITION of 'Accountant's Opinion'

A statement signed by an independent accountant outlining his or her opinion regarding the quality of information contained in a company's financial reports and records.

INVESTOPEDIA EXPLAINS 'Accountant's Opinion'

An accountant's opinion statement can either be qualified or unqualified. When the opinion is qualified, the accountant is questioning the accounting principles and/or scope of the information provided. An unqualified opinion is given when the accountant sees that the given information in the financial statements is sound. In other words, an unqualified opinion is desirable whereas a qualified opinion is not.

The subject of accountant independence became an important issue in the wake of the demise of such corporate giants as Enron and WorldCom in the early 2000's. Because Enron and WorldCom were large companies, they represented a substantial portion of their accounting firms' revenues. This lead to the speculation that the accountants could not provide truly independent opinions for these giant companies, who provided the accountants with extremely lucrative contracts but also might have terminated these contracts if undesirable accounting opinions were issued.

RELATED TERMS
  1. Statutory Audit

    A legally required review of the accuracy of a company's or government's ...
  2. Accountant's Liability

    An accountant's legal liability while performing professional ...
  3. Accounting

    The systematic and comprehensive recording of financial transactions ...
  4. Annual Report

    1. An annual publication that public corporations must provide ...
  5. Auditor's Report

    Recorded in the annual report, the auditor's report tests to ...
  6. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
Related Articles
  1. how to read a company's footnotes.
    Fundamental Analysis

    Financial Footnotes: Start Reading The Fine Print

    Find out what could be hidden in this often-overlooked part of the financial statements.
  2. Professionals

    Finding The Right Accounting Certification

    An accounting certification may be the boost your career needs. Find out how to get the most bang for your buck.
  3. Retirement

    Crunch Numbers To Find The Ideal Accountant

    The phone book isn't the best place to start your search. Learn some shopping tips here.
  4. Options & Futures

    Haunting Wall Street: The Halloween Terminology Of Investing

    Beware of zombies and Jekyll and Hyde companies! Read about the spooky terms circulating Wall Street.
  5. Options & Futures

    Advanced Financial Statement Analysis

    Learn what it means to do your homework on a company's performance and reporting practices before investing.
  6. Delivery duty paid (DDP) is a shipping term.
    Investing

    What does DDP Mean?

    Delivery duty paid (DDP) is a shipping term specifying that the seller is responsible for all costs associated with delivery of the goods to the buyer. It is usually used when goods are exported ...
  7. Fundamental Analysis

    What is a good interest coverage ratio?

    Learn the importance of the interest coverage ratio, one of the primary debt ratios analysts use to evaluate a company's financial health.
  8. Fundamental Analysis

    What is a bad interest coverage ratio?

    Understand how interest coverage ratio is calculated and what it signifies, and learn what market analysts consider to be an unacceptably low coverage ratio.
  9. Active Trading Fundamentals

    What is liquidity risk?

    Learn how to distinguish between the two broad types of financial liquidity risk: funding liquidity risk and market liquidity risk.
  10. Technical Indicators

    What is a good gearing ratio?

    Understand the meaning of the gearing ratio, how it is calculated, the definition of high and low gearing, and how they reflect relative financial stability.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center