An auditor's report includes the following statement: "The financial statements referred to above do not present fairly the financial position, results of operations, or cash flows in conformity with U. S. generally accepted accounting principles." This auditor's report was most likely issued in connection with financial statements that are

The answer is misleading or not free from material misstatement

Explanation:

When a financial statement is misleading or not free from material misstatement, an auditor issued a qualified report. This qualified report tells the users of the financial statement that something is wrong.

Material misstatement refers to an error in the financial statement that if omitted, it will affect the decision of the users.

If a financial statement is free from error or material misstatement, an auditor will issue unqualified report.

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