What is an Unqualified Audit?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 30 January 2020
  • Copyright Protected:
    Conjecture Corporation
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Also called a complete audit, an unqualified audit is a type of audit that uses all possible informational resources to evaluate a set of accounting books, and finds that those books are in harmony with those resources. In order to accomplish this task, the auditor not only evaluates the data found in the books themselves, but also looks closely at the system of checks and balances used by the company to make sure the accounting records are accurate. An unqualified audit is the goal for most companies, since the outcome indicates that the books are accurate and truthful, at least as far as the auditor can determine based on the documentation provided and the strength of those internal systems.

The unqualified audit is somewhat different from a qualified audit. With the latter, the emphasis is on assessing the data that is found in the accounting books and determining if the entry process appears to be working. While there may be some investigation into supporting documents, this is not always a requirement with a qualified audit. Instead, the auditor will assess the books, then render an opinion as to the manner in which entries are posted and provide suggestions for improving the overall maintenance of the accounting records.


Since the unqualified audit affirms the veracity of both the accounting books and the reliability of the company’s checks and balances in terms to keeping financial records, this type of audit is sometimes referred to as a clean opinion. This designation indicates that the accounting records are in compliance with generally accepted accounting principles, and the supporting documents attest to the accuracy of the data entered into the books. The lack of any type of errors or improprieties can be especially important to investors, since it demonstrates the dedication of the business to provide accurate and complete financial information in earnings reports and other documents that are issued to shareholders.

While a company may choose to conduct an internal audit from time to time, an impartial third party accounting firm usually conducts an external audit at least once each business year. This is important, since that firm is considered free from any type of bias, and will evaluate the recordkeeping and the supporting documentation objectively. Should that independent accounting firm find that all is in order and there are no indications of discrepancies, the results of the unqualified audit will be utilized to create financial reports for investors as well as aid in the process of preparing tax returns.



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