Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Unaudited Opinion

What it is:

An unaudited opinion is a written statement describing an auditor’s expectations about the outcome of its audit before the audit occurs

How it works (Example):

Before an audit occurs, the auditor may issue an unaudited opinion, expressing what it expects to find and its view of the overall condition of the company's books and records. An audit is an independent, unbiased and qualified evaluation of the accuracy and completeness of a company’s financial statements and practices, as well as an evaluation of a company’s compliance with Generally Accepted Accounting Standards (GAAP).

After the actual audit occurs, if the auditor feels that a company’s financial statements are fair and accurate, it issues an unqualified opinion and does so using a standard reporting template (this is why many opinions read the same way).

Why it Matters:

An unaudited opinion is a prediction about what the audit will find. The opinion may change after the actual audit is performed, though it is very important to understand that auditors are not responsible for detecting all instances of fraud or financial misrepresentation. An unaudited opinion occurs before those steps are taken and thus carries much less weight than an actual audit opinion.