What is a Clean Opinion?

A clean opinion is an unqualified auditor’s report regarding an entity’s financial statements. Such a report indicates the auditor’s belief that the entity’s financial statements fairly present its financial results, financial position, and cash flows. When an auditor does not believe that this is the case, a qualified opinion, adverse opinion, or disclaimer of opinion is issued. The investment community and lenders are usually only willing to invest funds in a business that has been accorded a clean opinion.

Advantages of a Clean Opinion

A business always wants to obtain a clean opinion from its outside auditor, since this assures its lenders, creditors, and investors that the organization has a robust accounting system that can consistently produce accurate financial statements.