What should appear at the end of any financial statement, in any annual or quarterly report, is an Unqualified Opinion. As the Wikipedia article just linked to states, this kind of external auditor's Opinion Report carries three paragraphs, which are exactly the same except for particulars. Paragraph 1 states the scope of responsibility of management and the auditors, Paragraph 2 describes the audit method, and Paragraph 3 gives the opinion. It's worth quoting in full:
"In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20XX, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in (the country where the report is issued)."
If you don't see exactly that, with the appropriate particulars filled in, then the company's in some sort of difficulty.
In the 2002 meeting with Jack Boultbee over the 2001 Hollinger Int'l annual report, Marilyn Stitt threatened to issue a Qualified Opinion because of the non-competes. Ostensibly, a Qualified Opinion is no big deal, as it simply states that one or more accounts either don't conform to generally-accepted accounting principles (GAAP) or else it's impossible to tell. A Qualified Opinion says that the statements do not contain any material misstatements nonetheless.
Legally, this says that there was no chicanery afoot as of the time the audit was conducted and to the best of the auditor's knowledge; an adverse opinion may indicate crookedness somewhere. From an investor's standpoint, though, a Qualified Opinion says that the company is keeping a sloppy set of books. Hence its status as a warning flag, whose flagpole points to the "Exit" door.
"Fine; I sold my shares through no fault of my own."
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