What it is:
An auditor’s 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 Standards (GAAP).'s letter, also called an opinion, is a written statement describing an
How it works/Example:
When an unqualified opinion and does so using a standard reporting template (this is why many opinions read the same way). An 's letter also includes a statement that the was conducted in accordance with . When the auditor cannot give an unqualified opinion, it issues a qualified opinion, which lists the reasons for the auditor’s concern about the company’s financial statements and controls and the possible effects on the financial statements.
Here is an example of an accountant's letter, for the Disney Corporation:
Why it matters:
An lenders and other people with an interest in the health of the company.
There is always a chance that an gives an when in fact the financial statements are materially misstated. This is called risk, and the auditor must use his or her about how much is acceptable and what errors are material enough to the restatement of the financials. In these situations, the definition of the word material becomes especially important, because shareholders, lenders and other interested parties make crucial decisions based on the quality of the information in a company’s financial statements.