When a Client Declines to Include a Statement of Cash

question 38

Multiple Choice

When a client declines to include a statement of cash flows in its financial report, the auditor's report will usually:

• A)include a separate paragraph that summarises the company's financing and investing activities.
• B)contain either a qualified or adverse opinion because of inadequate disclosure.
• C)refer to the scope limitation.
• D)contain either a qualified opinion or a disclaimer of opinion on the basis of the uncertainty caused by this disagreement with those charged with governance.

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Definitions:

Note Disclosure

Supplementary information provided in financial statements, offering insight into accounting policies, risks, and uncertainties.

Contingent Asset

An asset that might come into existence subject to the occurrence of some uncertain future event.

AASB 137

The Australian Accounting Standards Board standard that specifies the accounting for provisions, contingent liabilities, and contingent assets.

Deferred Liability

A deferred liability is a financial obligation that a company owes and is recorded on its balance sheet to be settled in a future period.