An accountant's compilation report on a financial forecast should include a statement that the
A) Compilation does not include evaluation of the assumptions underlying the forecast.
B) Hypothetical assumptions used in the forecast are reasonable.
C) Range of assumptions selected is one in which one end of the range is less likely to occur than the other.
D) Prospective statements are limited to presenting, in the form of a forecast, information that is the accountant's representation.

Question

Quizplus · Accepted Answer

The compilation report should explicitly state that the compilation based on management's assumptions and does not include an evaluation of the reasonableness of the underlying assumptions. This is important to avoid any confusion or misunderstanding about the accountant's role in compiling the financial forecast. B and C are not typically included in the compilation report, while D is not accurate because the prospective statements are the representation of management, not the accountant.

An Accountant's Compilation Report on a Financial Forecast Should Include