A state-registered IA accepts a $1,000 prepayment of advisory fees from a client, 7 months in advance, and has full authority to move client funds between accounts. The client requests to waive receipt of any financial statements. Under the USA, which of the following is TRUE?

1. AThe IA must deliver an annual audited balance sheet regardless of the client's request✓ Correct answer
2. BThe IA may forgo delivery of the balance sheet if the client requests
3. CDelivery is only necessary if the client has custody
4. DThe IA must also deliver quarterly account statements

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