List the types of opinions that may be issued by an auditor on a company's financial statements and explain the circumstances under which is issued

What will be an ideal response?

Answer: There are five types of opinions that may be issued on a company's financial statements:
1. Unqualified—This is also known as a "clean" opinion. This opinion asserts that the financial statements have been fairly presented in accordance with generally accepted accounting principles.
2. Unqualified Opinion with Explanatory Paragraph—This type opinion is issued with there is a lack of consistency or a going concern issue. The statements are fairly presented but an explanatory paragraph is needed to clarify a point.
3. Qualified—There is a scope limitation or a minor departure from GAAP.
4. Adverse—There is a major departure from GAAP, such as expensing all capital expenditures, that causes the financial statements to not be fairly presented in accordance with generally accepted accounting principles.
5. Disclaimer of Opinion—Because of a major scope limitation or a lack of independence on the part of the auditor, it is not possible to issue an opinion on the fair presentation of the financial statements. This is not the same thing as withdrawing from the engagement.