Lesson: Qualified and Adverse Opinions

This lesson focuses on understanding the reasons behind issuing qualified and adverse opinions in an audit. Nick Palazzolo, CPA, explains how the pervasiveness of an issue can determine whether a qualified or adverse opinion is given. He provides various examples, such as material illegal acts not being disclosed, material-related party transactions not being adequately disclosed, and improper departures from GAAP. In addition, Nick highlights specific scenarios that result in either a qualified or adverse opinion and discusses exceptions that might be encountered. The lesson also covers the importance of obtaining sufficient appropriate evidence, scope limitations, and the critical role that GAAP compliance plays in determining the audit opinion.