1. The accrued interest for a deposit (maturity less than 3 m) is included in “cash and cash equivalents” in BS?

2. If yes, the accrued interest (increase/decrease) is not an item in operating cash flow (in order to reconcile the bottom line from cash flow with the first line in balance sheet)?

(I am asking because my auditor request that in BS cash & equiv include accrued interest but in cash flow statements the accrued interest is not included (has a separate line in operating cash flow).