Adverse Opinion


DEFINITION of 'Adverse Opinion'

A professional opinion made by an auditor indicating that a company's financial statements are misrepresented, misstated, and do not accurately reflect its financial performance and health. Adverse opinions are usually given after an auditor's report, which can be internal or independent of the company.

BREAKING DOWN 'Adverse Opinion'

Adverse opinions are not a good thing for companies because it implies wrongdoing. An adverse opinion is a red flag for investors and can have major negative effects on stock prices. Auditors will usually give a red flag if the financial statements are significantly different from generally accepted accounting principals (GAAP).

  1. Audit

    An unbiased examination and evaluation of the financial statements ...
  2. Accountant's Liability

    An accountant's legal liability while performing professional ...
  3. Generally Accepted Auditing Standards ...

    A set of systematic guidelines used by auditors when conducting ...
  4. Auditor's Report

    Recorded in the annual report, the auditor's report tests to ...
  5. Auditor's Opinion

    A certification that accompanies financial statements and is ...
  6. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
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