The types of opinions issued by a certified auditor and their consequences

According to the Act of May 7, 2009 on certified auditors and their self-government, entities authorized to audit financial statements and public supervision, the main activities of certified auditors are related to financial auditing and therefore the audit of financial statements. 

What types of opinions can a certified auditor issue?

A certified auditor's opinion is a document that contains the final conclusions from an audit of financial statement. The release of this opinion is the most important goal of the audit. It is accompanied by an additional report from the audit and the audit documentation. The opinion should include the following components:

• title of the opinion,
• recipient of the opinion,
• company name,
• introduction,
• information on the standards and rules applied,
• declaration of sufficient certainty to issue an opinion,
• the opinion itself,
• possible supplementary explanations,
• identification data of the certified auditor,
• identification data of the entity that is authorized to to conduct the audit,
• date of opinion.

The opinion on the financial statements, which is expressed by the certified auditor, constitutes the general assessment of the information in the financial statements for the financial year as at the end date of the audit. It can be expressed as:

• unqualified opinion,
• opinion with reservations,
• negative opinion.

It is also possible for a certified auditor to refuse to issue an opinion.

Consequences of the different opinions issued by a certified auditor

If the certified auditor believes that the financial statements and accounting books comply with the provisions of the Accounting Act and that any violations of the law, the company statute or articles of association or any remaining issues outstanding are not significant to the credibility and transparency of the audited financial statements, then an unqualified opinion is issued. An opinion with reservations is issued when, due to the fault of the company or for reasons beyond its control, certain circumstances arose that prevented the auditor from obtaining sufficient certainty as to the credibility of certain elements of the financial statements. This does not adversely affect the credibility of the entire report – as the reservations result only from the limited scope of the audit or from certain departures from the applicable accounting principles.

The certified auditor may also issue a negative opinion - this applies to financial statements that do not meet the conditions required for issuing an unqualified opinion or an opinion with reservations, but which do not require a refusal to give an opinion. A refusal is possible when the effects of the audit limitations or other reasons prevent the application of appropriate audit procedures.

Both the unqualified opinion and the opinion with reservations may contain additional supplementary explanations, in which the auditor presents some uncertainties - these do not affect the general assessment of the financial statements, and are expected to be resolved at a later stage.

An auditor's refusal to issue an opinion is received negatively, because it suggests that the financial statements and the accounting records constituting the basis for its preparation contain certain irregularities that may result from mistakes made, abuses or violations of applicable regulations. Therefore, every effort should be made to correct the financial statements properly or to provide the auditor with the information necessary to express an opinion. Refusals to express an opinion can be avoided by presenting any statements that will be considered indispensable by the auditor, allowing access to minutes of management and supervisory board meetings, adjusting entries in accounting books (if there are significant irregularities), allowing the certified auditor to contact the legal advisor of the entity in legal disputes to which the entity is a party or granting permission to confirm a specific balance or other financial information.