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

CA Nisha is drafting her report on a projection for Bharat Logistics Pvt Ltd, to be used only for a proposed joint-venture negotiation. Which combination of contents is required or appropriate under SAE 3400?

The report should give an opinion that the information is properly prepared on the basis of the assumptions and presented under the relevant framework. It should also carry caveats on whether the results are achievable and, where applicable, refer to the purpose or restricted distribution. It is dated when procedures are completed.

  1. AOpinion on whether the information is properly prepared on the basis of the assumptions and presented under the relevant framework, plus caveats on the achievability of results, and a reference to restricted distribution where applicableCorrect
  2. BOnly a statement that management is responsible, with no caveat on achievability
  3. CA positive assurance that the assumptions are correct and that the targets will be met
  4. DA report dated the date of the board meeting approving the projection, whichever is earlier

Explanation

SAE 3400 requires the report to contain an opinion on proper preparation on the basis of the assumptions and presentation under the framework. It also requires appropriate caveats on achievability and, when applicable, a reference to the purpose or restricted distribution. The report is dated when procedures have been completed, not at the board meeting date, so the last option is wrong.

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