What Are Accountant’s Reporting Responsibilities Regarding Prospective Financial Statements?
Statement on Standards for Attestation Engagements #10 specifically precludes an accountant from compiling, examining, or applying agreed-upon procedures to prospective financial statements that fail to include a summary of significant assumptions. The practice standards in the Statement are not applicable: • To engagements involving prospective financial statements that are restricted to internal use. • To those used solely in litigation support services (e.g., in circumstances where the practitioner is serving as an expert witness) How Are Prospective Financial Statements Used? The intended use of an entity’s prospective financial statements governs the type of prospective financial statements to be presented: • When an entity’s prospective financial statements are for general use, only a financial forecast is to be presented. “General use” means that the statements will be used by persons not negotiating directly with the responsible party. For example: In a public offering of a tax
