The SEC requires firms to obtain an independent evaluation of the firms financial statements and adherence to GAAP. This comes in the form of an “auditors opinion” which can come in a few different flavors that are summarized briefly below:
Unqualified – free from errors and omission
Qualified – the statements make certain GAAP exceptions/exclusions
Adverse – the statements are not GAAP conforming or are not fair representations
Disclaimer – no opinion