If audited financial statements include a balance sheet and an income statement,but do not include a statement of cash flows:
A)The auditors may still issue an unmodified opinion.
B)The auditors should issue a qualified report for the departure from generally accepted accounting principles.
C)The auditors should issue a qualified report indicating a scope limitation in that no statement of cash flows is presented.
D)The auditors should disclaim an opinion on the overall financial statements.

Question

Quizplus · Accepted Answer

The absence of a statement of cash flows is a departure from generally accepted accounting principles (GAAP), which requires the inclusion of a statement of cash flows as part of a complete set of financial statements. Therefore, auditors should issue a qualified report for this departure.

If Audited Financial Statements Include a Balance Sheet and an Income