A client decides not to make an auditor’s proposed

A client decides not to make an auditor’s proposed adjustments that collectively are not material, and wants the auditor to issue the report based on the unadjusted numbers. Which of the following statements is correct regarding the financial statement presentation?

1. The financial statements are free from material misstatement, and no disclosure is required in the notes to the financial statements.

2. The financial statements do not conform with generally accepted accounting principles (GAAP).

3. The financial statements contain unadjusted misstatements that should result in a qualified opinion.

4. The financial statements are free from material misstatement, but disclosure of the proposed adjustments is required in the notes to the financial statements.