Final answer:
An adverse opinion is issued when significant internal control weaknesses are identified, indicating that the financial statements may contain material misstatements and are unreliable.
Step-by-step explanation:
When one or more material internal control weaknesses exist, auditors issue an adverse opinion. This type of report indicates that there are significant misstatements within the financial statements, and the inadequacies in internal controls prevent the company from ensuring the accurate financial reporting. An adverse opinion suggests that the financial statements should not be relied upon and essentially warrants the immediate attention and correction by management.
When one or more material internal control weaknesses exist, an adverse opinion is issued. An adverse opinion is given when the auditor determines that the financial statements do not present a true and fair view of the company's financial position. It indicates significant flaws in the company's internal controls that may affect its financial reporting.