Adverse opinion

If there is a material difference between the financial statements as reported by a company and the auditor's opinion of what the accounts should show, then this should be reflected in the audit opinion. The audit report should contain a warning that the accounts do not show a true and fair view of the company. This is an adverse opinion.

Adverse opinions are rare, and almost unknown among listed companies. If auditors are aware of problems that might cause them to issue an adverse opinion, they will warn the company sufficiently early to allow a solution to be found.