Unqualified Audit Opinion:
This happens when auditors examine the entity financial statements and concluded that there is no material misstatement found. This opinion is different from a qualified opinion.
The unqualified audit opinion is the opinion that issue by auditors in their audit report on the financial statements when those financial statements are prepared and presents in all material respect and compliance with applicable accounting standards.
Unqualified opinion, however, is the term used to describe unmodified audit opinion.
For example, if you look into ISA 700, Forming Unmodified audit opinion, and searching for word unqualified opinion, then you will never found it.
The thing is that standard use words unmodified, but we normally use words unqualified or unmodified.
When the audit opinion expresses an unqualified opinion, that mean level of integrity of financial statements as well as management who oversee the entity also better than modified audit opinion.
This might be helped management to obtain more fund from shareholders, investors, and banks.
Qualified Audit Opinion:
The qualified audit opinion is a type of audit opinion where opinion is modified from the standard opinion as the result of financial statements are not present true and fair or not fairly present in accordance with the standard and application framework.
Normally, if the result of audit testing found that the financial statements are a present true and fair view, then the standard unmodified opinion will be issued.
But, if the result of testing found there are material misstatements, then the auditor will need to modify its opinion.
The qualified audit opinion is not a good report to the company and management as the qualified opinion may lead the users to question the integrity of the entity’s financial statements and management.
The audit report will be issued to those charged with governance as well as investors and shareholders. These group of stakeholders questions managements as the result of the qualified audit opinion.
Sometime, if the bankers also need this report to let them assess the financial stability of the entity and how integrity management is, the bankers might not provide the loan to the entity or stop to extend some term with the entity.