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Prospective financial information
Acceptance considerations
Guidance is given in ISAE 3400 The Examination of Prospective Financial
Information
Matter under consideration Reason
The intended use of the Information for external use will be relied upon by
information, such as internal third parties, potentially for making investment
management or external decisions.
users
This makes it riskier for the accountant because the
consequences of inappropriate reports will be more
severe.
Whether the information will Information for general distribution will potentially
be for general or limited result in the assignment being higher risk as a larger
distribution audience will be relying on it.
The nature of the If information is best-estimate, it should be a
assumptions (e.g. best reasonable approximation as to what might actually
estimate or hypothetical) happen therefore lower risk.
Where the assumptions are hypothetical, they will be
more difficult to validate and therefore higher risk.
The elements to be included The engagement will be higher risk if the PFI includes
in the information elements of which the accountant has little
knowledge or that are extremely complex or highly
subjective.
The period covered by the Short-term forecasts are likely to be more easily
information verified than projections looking out over a longer
period therefore less risky.
The acceptance matters covered in Chapter 3 should also be considered.
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