If the financial statements include an income statement and a balance sheet but exclude the statement of cash flows, the auditors
A) can issue an unqualified report.
B) should issue a qualified opinion due to the departure from GAAP.
C) should issue a qualified opinion because the missing statement of cash flows constitutes a scope limitation.
D) should include the statement of cash flows, modify the report, and issue an unqualified opinion.

Question

Quizplus · Accepted Answer

The statement of cash flows is a required part of a complete set of financial statements for most entities according to Generally Accepted Accounting Principles (GAAP). Excluding it is considered a departure from GAAP, which typically results in the issuance of a qualified opinion.

If the Financial Statements Include an Income Statement and a Balance