What is Modified opinion?

The opinion the auditor issues when unable to express an unmodified opinion on the financial statements: when he concludes that the financial statements contain a material misstatement or when he cannot obtain sufficient appropriate evidence. There are three types; which one is chosen depends on how material the matter is and how pervasive it is across the financial statements.

• Qualified opinion: the misstatement is material but not pervasive; or evidence could not be obtained and its possible effect is material but not pervasive
• Adverse opinion: a misstatement that is both material and pervasive
• Disclaimer of opinion: sufficient appropriate evidence could not be obtained and its possible effect could be both material and pervasive