When an accountant compiles a financial forecast,the accountant's report should include a(an)
A)Explanation of the differences between a financial forecast and a financial projection.
B)Caveat that the prospective results of the financial forecast may not be achieved.
C)Statement that the accountant's responsibility to update the report is limited to one year.
D)Disclaimer of opinion on the reliability of the entity's internal controls.

Question

Quizplus · Accepted Answer

Including a caveat that the prospective results of the financial forecast may not be achieved is a common practice in accounting reports, as it acknowledges the inherent uncertainty in such projections and protects the accountant from any legal or professional liability in case the forecast does not come to fruition. The other options are either inaccurate (A and C) or irrelevant (D) to the contents of a financial forecast report.

When an Accountant Compiles a Financial Forecast,the Accountant's Report Should