What does an unmodified opinion indicate about financial statements?

An unmodified opinion is a type of audit opinion given by auditors when they conclude that the financial statements present a true and fair view of the entity's financial position and performance, and that they are free from material misstatements. This means that the financial statements have been prepared in accordance with the relevant reporting framework, such as International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP).

Receiving an unmodified opinion indicates that the auditor has found no significant errors or violations regarding how the financial statements adhere to these standards. It signifies high confidence in the integrity and accuracy of the financial information presented. This type of opinion assures stakeholders, such as investors, creditors, and regulators, that they can rely on the financial statements for decision-making purposes.

In contrast, the other options suggest issues with the financial statements, such as significant errors or non-compliance with reporting standards, which do not align with the indication of an unmodified opinion.