What does qualified opinion mean? What are the situations in which the auditor should qualify the assurance report?

Auditing and Assurance Revision Questions and Answers

A qualified opinion is issued when the auditor concludes that he cannot issue an unqualified opinion but that the effect of any disagreement, uncertainty or limitations on scope is not so material as to require an adverse or a disclaimer of an opinion. It is given in respect of a part of the information reflected in the financial statements and that the auditor is not in agreement with that part. Moreover, the part with reference to which he is not in agreement does not materially affect the view portrayed by the financial statements. Thus, the need for a qualified opinion arises where the auditor is satisfied with the truth and fairness of the financial statements; yet because of certain transactions he is not fully satisfied so as to issue a clean or unqualified report.
The auditor should qualify their Assurance Reports in case –
 accounting policies have not been properly disclosed, or
 accounts have not been prepared on accrual basis
 the fundamental accounting assumption of going concern has not been followed and this fact has not been disclosed in the financial statements, or
 proper disclosures regarding changes in the accounting policies have not been made.

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