An auditor certificate — also known as an audit opinion in the business environment — is the statement issued after a company undergoes a professional accounting audit. Auditors will spend a few days or weeks conducting the audit and testing the company’s financial information. Upon completion of this process, the auditor will release an opinion for use by internal and external business stakeholders. The information contained in the auditor certificate will provide a short statement on whether the auditor approves or disapproves of a company’s financial information. Four types of certificates are common: unqualified, qualified, disclaimer, or adverse opinion.
An auditor certificate that contains an unqualified opinion indicates the auditor has no lingering questions or doubts about the company’s financial information. Informally, this is known as a “clean bill of health,” mimicking the statement a doctor would give a healthy individual. The unqualified opinion assures business stakeholders that the financial statements comply with national accounting standards, internal controls are adequate, and no limitations existed throughout the course of the audit.
A qualified opinion means an auditor has an issue with the application of national accounting standards or some other issue exists as a result of the audit. This may include a failure to disclose material information relating to the company, an unfair representation of the company’s finances, or failure to properly apply accounting standards. This auditor certificate typically requires a company to undergo a remedial audit to retest financial information upon corrections being made.
The third auditor certificate is a disclaimer opinion. Auditors issue this statement when they have not completed a full audit of a company’s financial statements or financial information. This opinion is often associated with professional accounting services such as a review engagement, where accountants may provide companies with a cursory review of financial information rather than a full-blown audit. As expected, this opinion carries significantly less weight than other opinions.
An adverse audit opinion is the worst statement an auditor can make about a company’s financial information. An auditor will issue this opinion when he believes the company has significant material misstatements in its information, if he experienced significant limitations when conducting the audit, or he does not believe the company will remain a going concern. A going concern is a business phrase that indicates a company will be able to continue its operations for future years without running into significant disruptions. Auditors may begin an audit and stop midway when issuing an adverse opinion. This will conclude the audit and alert stakeholders of the company’s position.