Which of the following statements regarding prospective financial statements is most correct?
A) CPAs are not attesting to the accuracy of the prospective financial statements.
B) CPAs are attesting to the accuracy of the prospective financial statements.
C) CPAs are performing a review on the company's assumptions and hypotheticals that underlie the prospective financial statements.
D) CPAs are performing a review on the achievability of the prospective financial statements.

Question

Quizplus · Accepted Answer

While a CPA may assist or provide guidance in the preparation of prospective financial statements, they are not providing an attestation or assurance of their accuracy. Prospective financial statements are forward-looking and based on assumptions and hypotheticals about future events, which inherently involve uncertainty and risk. Therefore, there are limitations to the extent to which a CPA can provide assurance on them.

Which of the Following Statements Regarding Prospective Financial Statements Is