Among audit opinions, which describes a situation where the statements are fairly presented but with some exceptions?

• A. Unqualified opinion
• B. Disclaimed opinion
• C. Adverse opinion
• D. Qualified opinion

Answer: (D)

The idea being tested is how auditors express an opinion when there are issues, but those issues aren’t widespread enough to undermine the entire set of financial statements. When the statements are fair overall but there are specific, limited exceptions, the auditor issues a qualified opinion. The report notes that the financial statements are fairly presented except for the particular matter described, which means the rest of the statements conform to GAAP.

If the issues were pervasive and would misstate the statements as a whole, the opinion would be adverse. If the auditor couldn’t obtain sufficient evidence or the scope was too limited, the opinion would be disclaimed. If there were no material issues, the opinion would be unqualified. So “statements are fairly presented but with some exceptions” fits a qualified opinion.