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CA Final · Advanced Auditing, Assurance and Professional Ethics · Prospective Financial Information and Other Assurance Services

CA Nandini is preparing her report on a projection of Orbit Foods Ltd. Which of the following would NOT be an element she is required to include under SAE 3400?

A guarantee that projected results will be achieved is not required and would be improper. SAE 3400 requires management responsibility, test-basis procedures, negative assurance on assumptions, an opinion on proper preparation, caveats on achievability, and a report date equal to the date procedures were completed.

  1. AA statement that management is responsible for the prospective financial information including the underlying assumptions
  2. BA statement that examination procedures included examination, on a test basis, of evidence supporting the assumptions, amounts and other disclosures
  3. CA guarantee from the auditor that the projected results will be achievedCorrect
  4. DThe date of the report, being the date procedures have been completed

Explanation

SAE 3400 lists title, addressee, identification of the information, reference to standards, management responsibility, purpose or restricted distribution where applicable, test-basis procedures, negative assurance on assumptions, an opinion on proper preparation, caveats on achievability, date, place and signature. A guarantee of achievement is not included and is contrary to the caveats required.

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