Unmodified Opinion
A clean opinion stating the financial statements are presented fairly in accordance with the framework.
On the exam, the tell is a fact pattern with no material misstatement and no scope limitation — the only cell in the opinion grid that yields a clean report. The trap is assuming that anything added to the report degrades it. It does not: an emphasis-of-matter or other-matter paragraph (AU-C 706), a justified change in accounting principle (AU-C 708), a going-concern section for substantial doubt (a separate headed section since SAS 134 — older banks still call it an emphasis-of-matter paragraph), or key/critical audit matters (KAM under AU-C 701; CAM for PCAOB issuers under AS 3101) all coexist with an unmodified opinion. The principle: extra communication ≠ modification.
Distinguish the neighbors: a qualified opinion adds “except for” for a material-but-not-pervasive problem; adverse (a pervasive GAAP departure) and disclaimer (a pervasive scope limitation) require pervasiveness. Item-writers exploit the standard-setter split — AICPA/AU-C for nonissuers, PCAOB for issuers — so read who’s being audited before picking the report.
PlayPrepHQ study notes are written and reviewed against primary exam sources. How we create & review content →