1: There are four different types of audit reports. There are (1) unqualified reports, (2) qualified reports, (3) adverse reports, and (4) disclaimer reports. An unqualified report is issued when the independent auditor finds that the books and records of the company being audited conform to generally accepted accounting principles. A qualified report would be issued when the auditor encounters one of two types of situations which do not comply with generally accepted accounting principles. However, the rest of the financial statements are fairly presented. A qualified report states that the financial statements of the company being audited are fairly presented except for the manner in which one or more aspects of the company's accounting books and records do not conform to generally accepted accounting principles (GAAP). An adverse report would be issued if and when an auditor find s that the client's financial statements are not in conformity with GAAP and that the deviation from GAAP materially affects the accuracy of the company's financial statements. A disclaimer report is issued when an independent auditor wishes to disclaim an opinion about the accuracy of the financial statements. Typically, this disclaimer is issued when the auditor is unable to obtain sufficient, verifiable information or documentation from which to draw conclusions about the accuracy of the financial statements, or when the auditor's independence has been hampered by the company that is the subject of the audit.
             2: An unqualified opinion is issued if and when the independent auditor determines the company's financial statements are free of material misstatements and are in accordance with GAAP. Issuance of an unqualified opinion indicates that the independent auditor believes that the company's financial condition, position, and operations are fairly presented in the financial statements prepared by the company.
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