Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Accountant's Opinion

What it is:

An accountant's opinion is a concise written statement by a certified accountant concerning the accuracy of a company's financial records.

How it works (Example):

An accountant's opinion is the first document in a company's financial report. Prepared by an independent accounting professional, it expresses the accountant's standpoint on a company's accounting methods. In addition, it expresses the accountant's confidence in the veracity of the company's financial statements insofar as they reflect the underlying financial data. An unqualified opinion reflects a positive viewpoint on the part of the accountant and is preferable to a qualified opinion, which expresses concern.

Why it Matters:

An accountant's opinion provides the readers and analysts of a company's financial report with the educated opinion of a third party. Though it indicates to the reader how he should approach the financial figures, the opinion can be highly detrimental if negative (qualified), because it can dissuade prospective investors and may impel some holders to divest.