Audit Opinions Studies: Review of Qualified Opinions and Emphasis of Matter Paragraphs in the Financial Statements of Brazilian Public Firms

Abstract

The auditor issues qualified opinions when he has taken exception to certain current-period accounting applications or is unable to establish the potential outcome of a material uncertainty reasons. Therefore, a relevant research question is: what are the more usual causes that produce the issuing of audit opinions with the emphasis of matter paragraphs and/or qualified opinions? The objective of this study is to identify what are the more usual causes that result in the issuing of audit opinions with the emphasis of matter paragraphs and/or qualified opinions in Brazilian public firms. The adopted methodological procedure is content analysis, by the use of descriptive and bibliographical research and a qualitative approach. The population analyzed involves the opinions of public listed companies in the Bolsa de Valores de São Paulo ranging from 2006 to 2008. The sample has 1,466 financial statements where 647 statements exhibit audit opinions with the emphasis of matter paragraphs and/or qualified opinions. The results evidence that the major causes for qualified opinions are related to limits of scope and the inability to establish the potential outcome of a material uncertainty. Otherwise, the causes for opinions with emphasis of matter paragraphs show successively negative results, negative equity and problems of working capital. Therefore, these evidences suggests the necessity of larger specifications in audit opinions in order to ensure the absence of the problems related to the scope of audit works and also in obtaining the information about recognition, measurement and disclosure.