What is an Except-for Opinion?

An except-for opinion is rendered by an external auditor when unable to audit parts of a client's operations. The issue arises when management imposes restrictions or when other conditions occur that make it impossible to engage in certain auditing procedures. Under these circumstances, the auditor typically renders an opinion "except for" the conditions stated in a following paragraph of the opinion. Organizations try to avoid an except-for opinion, since it can be an indicator to outsiders that there are problems with their financial statements.

An except-for opinion is not as bad as an adverse opinion, where the auditor states that the client’s financial statements are not in conformity with generally accepted accounting principles. An except-for opinion is also not as bad as a disclaimer of opinion, in which the auditor cannot form an opinion regarding the fairness of the client’s financial statements.