What is the difference between qualified and unqualified audit report?

Qualified opinion is formed when financial statement assertions carries material or material & pervasive misstatements .Financial statements are not being prepared as per International Accounting standards.Whereas unqualified opinion is audit statements are free from material misstatement and bias

Qualified ReportA qualified report is one in which the auditor concludes that most matters have been dealt with adequately, except for a few issues. An auditor’s report is qualified when there is either a limitation of scope in the auditor’s work, or when there is a disagreement with management regarding application, acceptability or adequacy of accounting policies. For auditors an issue must be material or financially worth consideration to qualify a report. The issue should not be pervasive, that is, the issue should not misrepresent the factual financial position. If issues are material and pervasive, the auditor issues a disclaimer or adverse opinion. A qualified audit report does not mean that your business is suffering, and it doesn't mean that your financial statement isn't transparent. It merely reflects the auditor’s inability to give a clean report.

Unqualified ReportIn an unqualified report, the auditors conclude that the financial statements of your business present fairly its affairs in all material aspects. The opinion embodies the assumptions that your business observed compliance with generally accepted accounting principles and statutory requirements. Also known as a clean report, such a report implies that any changes in the accounting policies, their application and effects, are adequately determined and divulged. This opinion does not tell that your business is in good economic health. It merely states that your financial report is transparent and thorough and has not hidden important facts.