list two consequences for a company if they receive a qualified audit opinion?
Question: list two consequences for a company if they receive a qualified audit opinion?
A qualified audit opinion is a statement issued by an auditor that indicates that the financial statements of a company are fairly presented, except for a certain issue or limitation. A qualified audit opinion can have negative implications for a company, such as:
- Reduced credibility: A qualified audit opinion can damage the reputation and trustworthiness of a company in the eyes of its stakeholders, such as investors, creditors, customers, suppliers, regulators, and employees. A qualified audit opinion may suggest that the company has poor accounting practices, internal controls, or governance structures, or that it is hiding or misrepresenting some information.
- Increased costs: A qualified audit opinion can also increase the costs and risks for a company. For example, the company may face higher interest rates or lower credit ratings from lenders, higher audit fees or penalties from regulators, lower stock prices or dividends from investors, or lower sales or profits from customers. The company may also have to spend more time and resources to resolve the issue or limitation that caused the qualification.
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