The party responsible for assumptions identified in the preparation of prospective financial statements is usually:
A)A third-party lending institution.
B)The client's management.
C)The reporting accountant.
D)The client's independent auditor.

Question

Quizplus · Accepted Answer

The client's management is responsible for providing the assumptions and estimates used in the preparation of prospective financial statements. The reporting accountant may review and provide assurance on the reasonableness of these assumptions, but ultimately it is the responsibility of the client's management to provide accurate and reliable information. A third-party lending institution or the client's independent auditor may also rely on these assumptions when making decisions, but they are not responsible for their creation.

The Party Responsible for Assumptions Identified in the Preparation of Prospective