What is the best reason that standards prohibit accepting an engagement on a projection for general use?
A) The CPA's procedures would violate SSARS.
B) Reports on projections are not well understood by the general public.
C) Underlying hypothetical assumptions are difficult to interpret without obtaining additional information.
D) The CPA is not qualified to report on the use of GAAP in the projected financial statement.

Question

Quizplus · Accepted Answer

Projections are based on hypothetical assumptions that are difficult to interpret without additional information. Therefore, standards prohibit accepting an engagement on a projection for general use to prevent misleading users who may not understand the limitations and underlying assumptions of the projected financial statement.

What Is the Best Reason That Standards Prohibit Accepting an Engagement