Author Question: What does the adverse opinion of an auditor mean in terms of a firm's financial ... (Read 39 times)

Mimi · **on:** Jul 14, 2018

What does the adverse opinion of an auditor mean in terms of a firm's financial statement?

Question 2

Which of the following is an example of a horizontal merger?
A) The purchase of a catering firm by Delta Airlines
B) The purchase of Marathon Oil Company by U.S. Steel
C) The purchase of Kentucky Fried Chicken by PepsiCo
D) The purchase of Sam's Meat Packing Company by the Kroger supermarket chain
E) The purchase of Mobil Oil by Exxon

allisonblackmore · **Reply #1 on:** Jul 14, 2018

Answer to Question 1

When auditors discover serious and widespread problems with a firm's statements, they offer an adverse opinion. An adverse opinion indicates that the auditor believes the financial statements are seriously flawed and that they may be misleading and unreliable. Adverse opinions are very rare, so when an auditor renders one it should set off alarm bells, warning stakeholders to view the information in the firm's financial statements with real skepticism.

Answer to Question 2

E