An adverse opinion is issued when the auditor believes
◦ some parts of the financial statements are materially misstated or misleading.
◦ the financial statements would be found to be materially misstated if an investigation were performed.
◦ the auditor is not independent.
◦ the overall financial statements are so materially misstated that they do not present fairly the financial position or results of operations and cash flows in conformity with GAAP.