Qualified opinion

An audit opinion stating that the accounts are true and fair except for one identified issue. It is a step below a clean opinion and short of the two pervasive outcomes: an adverse opinion, where the accounts are materially wrong throughout, and a disclaimer, where the auditor could not gather enough evidence to form an opinion at all.

The qualification is written in plain language and names the amount wherever it can be quantified: a receivable the auditor could not verify, an investment carried above its likely value, an accounting treatment that departs from the standard.

Respond with arithmetic, and leave alarm aside. Adjust the accounts for the qualification and see what's left. A qualification worth ₹8 crore at a company earning ₹600 crore is noise; the same qualification at a company earning ₹20 crore is the whole story.

Repeated qualifications on the same point across years, with no resolution, say something about the board rather than about the accounting.

Hold the four opinions apart, because the words are similar and the meanings aren't. A clean opinion says the accounts are true and fair. A qualified opinion says they are, except for one identified thing. An adverse opinion says they aren't, and a disclaimer says the auditor could not gather enough evidence to say either way. Both are pervasive. One is about misstatement and the other about missing evidence, and the auditing standards don't rank one above the other. A move from a clean opinion towards either of them from one year to the next is a stronger signal than any ratio, and it's stated on the first page of the audit report in plain language.

Adjust the numbers, then decide.