What is an adverse opinion?
Whether the entity being audited is an issuer or a nonissuer, an adverse opinion would be distributed if there is a material departure from U.S. GAAP (financial reporting issues), and those departures are both deemed material and pervasive by the auditor.
Some reasons for an auditor issuing an adverse opinion will be due to:
1) Insufficient disclosures
2) An unjustified departure from U.S. GAAP
3) An unreasonable accounting estimate
4) An unjustified U.S. GAAP consistency change
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