The responsible party for assumptions identified in the preparation of prospective financial statements is usually:
A)a third-party lending institution.
B)the client's management.
C)the reporting accountant.
D)the client's independent auditor.

Question

Quizplus · Accepted Answer

The client's management is responsible for identifying and informing the reporting accountant of any assumptions used in the preparation of prospective financial statements. The reporting accountant may review and evaluate these assumptions, but ultimately it is the client's responsibility to ensure that they are reasonable and supported by appropriate evidence. The third-party lending institution and independent auditor may also review and evaluate these assumptions, but their primary responsibility is to assess the overall reliability and accuracy of the financial statements.

The Responsible Party for Assumptions Identified in the Preparation of Prospective