Huggins Ltd is required to but does not wish to prepare and issue a statement of cash flows as part of its financial report. In these circumstances, the auditor's report should include:
A) an adverse opinion stating that the financial report, taken as whole, is not fairly presented because of the omission of the required statement.
B) an unmodified opinion with a statement of cash flows prepared by the auditor included as part of the auditor's report.
C) an unmodified opinion with an Emphasis of Matter section explaining that the company declined to present the required statement.
D) a disclaimer of opinion with a separate explanatory paragraph stating why the company declined to present the required statement.

Question

Quizplus · Accepted Answer

The auditor is required to express an adverse opinion as the omission of the statement of cash flows violates a fundamental accounting principle and the financial report is incomplete without it.

Huggins Ltd Is Required to but Does Not Wish to Prepare