There are three levels of assurance that can be provided on assurance engagements, including audits and reviews:
- Unmodified Opinion: Indicates that the financial information being reported is presented fairly, in all material respects, in accordance with the applicable financial reporting framework.
- Modified Opinion: Indicates that the financial information being reported is presented fairly, in all material respects, in accordance with the applicable financial reporting framework, except for certain specified matters. A modified opinion can be issued in the form of a qualified opinion, adverse opinion, or disclaimer of opinion.
- Negative Assurance: Negative assurance is the lowest level of assurance and indicates that the assurance practitioner has not identified any material misstatements in the financial information being reported. Negative assurance is often provided in the form of a “review engagement letter.” Based on the level of assurance provided, the following reports can be issued on assurance engagements:
- Audit Report: An audit report is issued when an audit engagement has been performed and provides the auditor’s opinion on the financial information being reported.
- Review Report: A review report is issued when a review engagement has been performed and provides the reviewer’s conclusion on the financial information being reported.
- Qualified Opinion: A qualified opinion is a modified opinion that indicates that the financial information being reported is presented fairly, in all material respects, in accordance with the applicable financial reporting framework, except for certain specified matters.
- Adverse Opinion: A modified opinion that indicates that the financial information being reported is not presented fairly, in all material respects, in accordance with the applicable financial reporting framework.
- Disclaimer of Opinion: A modified opinion that indicates that the assurance practitioner was unable to obtain sufficient evidence to form an opinion on the financial information being reported.