Imagine The Voice or American Idol, except where the judges are all accountants.
Once auditors have completed an evaluation of a company's financial statements, they issue a document called (without much creativity) the "auditor's opinion." There are three basic types of opinions (the financial equivalent of "marry, date, kill"): an unqualified opinion, a qualified opinion and adverse opinion.
An unqualified opinion might sound like when that pretentious guy at dinner starts spouting off about wine. But in fact, the "unqualified" version is the most common result and by far the most positive. It basically says the auditor approves the results without qualification (thus the name "unqualified"), agreeing that the numbers accurately reflect the company's financial situation.
The qualified opinion is like when you talk about a movie after only seeing the trailer. It outlines ways in which the audit may have been limited...basically saying "everything looked okay that we could see, but we didn't get to look at everything."
Then there's the real bummer. An adverse opinion suggests that the financial statements have serious issues and the auditor is not willing to stand behind them as an accurate portrayal of the company's finances. This option is rarely used. If the auditor has issues with the financial statements, they will often opt for a fourth possibility, known as a disclaimer. This option represents the auditing equivalent of saying "pass"...the auditor issues no opinion and then describes why they couldn't come to an adequate conclusion.
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Finance: What is AICPA?6 Views
Finance a la shmoop what is the AICPA alright people when you think wild and [People dancing in a club]
crazy parties rock stars jumping into swimming pools from the seventh floor [Man jumps off rooftop into swimming pool]
teenagers in skimpy swimsuits running down the halls of hotels you don't think
of the AICPA why because it stands for the American Institute of Certified
Public Accountants and their parties are just different [Group of people sipping cocktails]
yeah the AICPA is responsible for setting US accounting standards it
sets ethical standards so there isn't a CPA somewhere writing off weekly [Roosters preparing to fight]
trips to a cockfighting arena as, you know travel expense it sets all kinds of
professional standards as well like common tax practices, financial statement
auditing practices and quality control for accounting firms so that no matter
which accounting office you visit the coffee in the lobby can't be cold [Man drinking coffee]
come on AICPA you can do better than that all right well the AICPA also puts
together and grades the exam you have to take if you want to become one of those [Boy studying for exam]
accountant people the uniform CPA exam ...Fail to pass that
baby and you may only be able to get a job counting actual beans not the [Man counting beans on conveyor belt]
financial ones so yeah the AICPA is the wizard behind
the curtain of the world of CPA-ing certified public accounting yeah they're
they're just concerned with a different kind of green like AC/DC green [Man singing AC/DC into microphone]
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