Adverse opinion
ESG & GovernanceAn audit opinion stating that the financial statements as a whole are materially misstated and do not give a true and fair view.
An adverse opinion under SA 705 is given when misstatements are both material and pervasive. It is rare, because companies usually correct their accounts before it comes to this. An adverse opinion means the reported numbers cannot be relied on at all. For analysts and lenders, it calls for treating every figure in the accounts with extreme caution.
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