What is Adverse Opinion?

An adverse opinion refers to the conclusion by an auditor that a company's financial statements inaccurately characterize the company's financial standing.

How Does Adverse Opinion Work?

An adverse opinion is an internal or independent auditor's official written statement of no-confidence in a company's financial statements insofar as it reflects the company's true financial status and adherence to generally accepted accounting principles (GAAP) and disclosure of information.

Why Does Adverse Opinion Matter?

The issuance of an adverse opinion can have serious repercussions for a company as far as its reputation and valuation in the market.