Accepting an engagement to compile a financial projection for a publicly held company most likely would be inappropriate if the projection were to be distributed to:

Question

Quizplus · Accepted Answer

Choice "D" is correct. Accepting an engagement to compile a financial projection for a publicly held company most likely would be inappropriate if the projection were to be distributed to all stockholders of record as of the report date (general use). Only a financial forecast is suitable for general use. Choices "A", "B", and "C" are incorrect. Financial projections are for limited use, and may be used by the responsible party alone (choice "C" - the principal stockholder only), or by the responsible party and third parties with whom the responsible party is negotiating directly (choices "A" and "B"-a bank or a labor union with which the entity is negotiating).

Accepting an Engagement to Compile a Financial Projection for a Publicly