CFA® Level I question of the day
8 October 2026 · Financial Statement Analysis
Zenith Mining's auditor reports that management refused access to the records of a subsidiary that generates most of the group's revenue. As a result the auditor could not obtain sufficient evidence about the statements as a whole and was unable to reach any conclusion on whether they are fairly presented. The audit committee chair asks an analyst, Daniel Ortiz, to name the opinion issued. Which opinion has the auditor given?
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Answer: A. A disclaimer of opinion
The auditor could not obtain sufficient evidence for a large part of the business and therefore cannot form an opinion on the statements. That is a disclaimer of opinion. It differs from an adverse opinion, which is a stated disagreement (the statements are not fairly presented), and from a qualified opinion, which is bounded: the auditor names one item and says the rest is fairly presented. A disclaimer is unbounded because the auditor does not know. Many analysts treat it as a more serious signal than a stated disagreement, since the reliability of every number is in doubt and the refusal of access is itself a warning about management.
- B. An adverse opinion — An adverse opinion states that the statements are not fairly presented, so the auditor has reached a view. Here the auditor reached no view at all.
- C. A qualified opinion — A qualified opinion excepts a specific item and says the rest is fairly presented. Here the missing evidence affects the statements as a whole, so no conclusion can be given.
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