Accepting an engagement to examine an entity's financial projection most likely would be appropriate if the projection were to be distributed to:
A)All employees who work for the entity.
B)Potential stockholders who request a prospectus or a registration statement.
C)A bank with which the entity is negotiating for a loan.
D)All stockholders of record as of the report date.

Question

Quizplus · Accepted Answer

Accepting an engagement to examine an entity's financial projection would be appropriate if the projection is to be distributed to a bank with which the entity is negotiating for a loan. This is because the bank would require an independent examination of the projection in order to determine the entity's ability to repay the loan. Engagements to examine financial projections are typically not intended for distribution to all employees or all stockholders, but rather for specific parties with a financial interest in the entity, such as lenders or investors.

Accepting an Engagement to Examine an Entity's Financial Projection Most