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The auditor's report

The audit opinion, critical audit matters and auditor changes, with Apple's fiscal 2026 10-K and an Item 4.01 filing.

The four kinds of opinion

• Unqualified (clean): the statements are fairly presented. Almost every large company gets this one.
• Qualified: fairly presented except for a specific matter.
• Adverse: the statements are not fairly presented.
• Disclaimer: the auditor couldn't get enough evidence to give an opinion.

A clean opinion can still include an explanatory paragraph, for example about a change in accounting method or substantial doubt about the company's ability to continue as a going concern.

Critical audit matters

Since 2019 for the largest companies, US auditors describe critical audit matters (CAMs): areas that were communicated to the audit committee, relate to accounts that are material, and involved especially challenging, subjective or complex judgments. For each one the report explains why it was hard and what the auditor did. A CAM doesn't mean something is wrong; it shows where the numbers rest most on judgment.

Apple's 10-K for fiscal 2026 lists one: uncertain tax positions. Ernst & Young notes that at Sep 26, 2026 Apple's gross unrecognized tax benefits were $22.5 billion, of which $10.6 billion would affect the effective tax rate if recognized, and that judging whether tax positions will be sustained is complex. The report also says EY has been Apple's auditor since 2009, and refers to its separate clean opinion on Apple's internal control.

The parts of the report

• Opinion on the financial statements, with the years and statements it covers.
• Basis for opinion: management is responsible for the statements; the auditor is registered with the PCAOB and independent.
• Critical audit matters, one by one.
• Tenure: the year the firm started auditing the company.
• Opinion on internal control over financial reporting, for large accelerated and accelerated filers. Internal control covers it.

When the auditor changes: Item 4.01

A company must report a change of auditor on Form 8-K under Item 4.01, saying whether there were disagreements, and the departing firm sends a letter to the SEC saying whether it agrees, filed as Exhibit 16.1. Most changes are routine. Super Micro Computer's 8-K of Oct 30, 2024 is a less routine one: it reported that Ernst & Young had sent the audit committee a letter of resignation while the fiscal 2024 audit was under way, and attached EY's letter as Exhibit 16.1. That 10-K was filed months late, as late filings describes.

More in Learn and Tools · Methodology & Disclosures explains where every number comes from.