148 a financial forecast consists of prospective

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148. A financial forecast consists of prospective financial statements that present an entity’s expected financial position, results of operations, and cash flows. A forecast A. Is based on the most conservative estimates. B. Present estimates given one or more hypothetical assumptions. C. Unlike a projection, may contain a range. D. Is based on assumptions reflecting conditions expected to exist and courses of action expected to be taken. 149. When an accountant examines prospective financial statements, the accountant’s report should include a separate paragraph that A. Contains an opinion as to whether the prospective financial statements are properly prepared on the basis of the assumptions and are presented in accordance with generally accepted accounting principles in the Philippines. B. Provides an explanation of the differences between an examination and an audit. C. States that the accountant is responsible for events and circumstances up to 1 year after the report’s date. D. Disclaims an opinion on whether the assumptions provide a reasonable basis for the prospective financial statements. 150. The following statements relate to the examination of prospective financial information. Which is false? A. The auditor should express an opinion as to whether the results shown in the prospective financial information will be achieved. B. Before accepting an engagement to examine prospective financial information, the auditor should consider the intended use of the information. C. The auditor should not accept, or should withdraw from, an engagement to examine prospective financial information when the assumptions are clearly unrealistic. D. When in the auditor’s judgment an appropriate level of satisfaction has been obtained, the auditor is not precluded from expressing positive assurance regarding the assumptions. --- END ---
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