An auditor gives an unmodified opinion if the financial statements present true and fair view. In all other circumstances, the auditor gives a modified opinion. The auditor uses different techniques and methods and also applies different procedures to see if the financial statements are free of material misstatements. If all the information in the financial statement is materially correct, the opinion of the auditors will be un-modified opinion. In its contrary, if there are the chances that the information in the financial statement are having some material errors, the auditors gives a modified opinion.
The modified opinion means the future amendments which have to be followed in order to make the financial statement transparent and clear. Modified opinion is somehow similar to the qualified opinion where the auditors suggest the future procedures to avoid the misstatement in the financial statements. While giving the modified opinion, the auditors must have some set of strong evidences which will support their opinion. Although they are not fully liberal to suggest and implement any procedure, here also there is the intervention of the managers and other management staff.
Auditors must have the set of strong evidences which they can interpret from the errors in the financial statement. If there is no error in the financial statement, there would be no place for the modified opinion as all the information in the financial statements is correct and there would be no need of any modification. The modified opinion only suggests how to avoid and rectify the errors in the financial statement rather than making forecasts like which is done in the qualified opinion.