An examination of a financial forecast is a professional service that involves:
A)compiling or assembling a financial forecast that is based on management's assumptions.
B)limiting the distribution of the accountant's report to management and the board of directors.
C)assuming responsibility to update management on key events for one year after the report's date.
D)evaluating whether the computations of prospective amounts are mathematically accurate and assumptions are internally consistent.

Question

Quizplus · Accepted Answer

Evaluating the mathematical accuracy of computations and consistency of assumptions is an essential part of examining a financial forecast. Options A and B are not accurate, as management typically provides the assumptions, and the accountant's report may be distributed beyond management and the board. Option C is not a standard requirement for this service.

An Examination of a Financial Forecast Is a Professional Service