Accountant's Opinion

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.

BREAKING DOWN '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. Opinion Shopping

    The practice of searching for an outside auditor who will provide ...
  2. Qualified Opinion

    A statement written upon the front page of an audit done by a ...
  3. Auditor's Opinion

    A certification that accompanies financial statements and is ...
  4. Unqualified Opinion

    An independent auditor's judgment that a company's financial ...
  5. APB Opinion

    An authoritative pronouncement issued by the Accounting Principles ...
  6. Accountant's Letter

    A letter that usually precedes a financial report. An accountant's ...
Related Articles
  1. Investing

    Why Companies Welcome an Unqualified Opinion

    An unqualified opinion is an independent auditor’s opinion that a company’s financial statements are fair and accurate.
  2. Managing Wealth

    Accountant: Job Description & Average Salary

    Discover what the job description of an accountant entails, along with education and training, salary and skills necessary for success.
  3. Trading

    Can Perpetual Contrarians Profit As Traders?

    Succeeding as a contrarian is all about knowing when to act on your opinion about the next turn in the market.
  4. Investing

    Accounting Basics: Branches Of Accounting

    By Bob Schneider Accounting can be divided into several areas of activity. These can certainly overlap and they are often closely intertwined. But it's still useful to distinguish them, not ...
  5. Financial Advisor

    Financial Accounting

    Financial accounting is the process of gathering, recording, summarizing and reporting financial data relating to a business. The ultimate goal is to accurately report the financial picture and ...
  6. Markets

    What is Accounting?

    Accounting is the recording of financial transactions of a business or organization. It also includes the process of summarizing, analyzing and reporting these transactions in financial statements.
  7. Investing

    A Day In The Life Of An Accountant

    An analysis of the accountant profession, who becomes an accountant, what they do, where they work, and salary ranges.
  8. Investing

    12 Things You Need To Know About Financial Statements

    Discover how to keep score of companies to increase your chances of choosing a winner.
  9. Investing

    What are Financial Statements?

    Financial statements are a picture of a company’s financial health for a given period of time at a given point in time. The statements provide a collection of data about a company’s financial ...
  10. Personal Finance

    What is an Account Balance?

    An account balance represents the total amount of money in a financial account at any given moment.
RELATED FAQS
  1. How should we invest to save and build our retirement fund?

    The money that we allocated to stocks and mutual funds decreased $3K last month, reducing our total re... Read Answer >>
  2. What are the objectives of financial accounting?

    Learn about the principle objectives of financial accounting, including the furnishing of the financial statements for those ... Read Answer >>
  3. Where did market to market (MTM) accounting come from?

    Find out how mark to market accounting originated and how it has been forced to evolve to eliminate subjectivity from financial ... Read Answer >>
  4. How do investors and lenders benefit from financial accounting?

    Read about the benefits of financial accounting, including access to information and transparency between companies and their ... Read Answer >>
  5. What is the difference between a compiled and a certified financial statement?

    All publicly-traded companies are required to provide financial statements, including a balance sheet, cash flow statement ... Read Answer >>
  6. What are the main objectives of cost accounting?

    Learn about the main benefits of cost accounting systems, why they are different from financial accounting and why they are ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center