Question

The management of a company, to which AS-$3$. is not applicable, does not include statement of cash flows in its annual report. The auditor should express _____________ .

• A. Unqualified opinion
• B. Qualified opinion
• C. Adverse opinion
• D. Any of these depending upon materiality and pervasiveness and adequacy of disclosure

Answer 1

The correct option is A Unqualified opinion

Unqualified opinion provided by auditor means a clean report by auditor.

A certain category of companies are not required to prepare cash flow, that does not mean that it is a wrong done by the company.

Qualified opinion refers to one where based on sufficient and appropriate evidences obtained by the auditor, misstatements are material and not pervasive to the financial statements, non-applicability of AS-3 does not lead to any qualification of report.