An Examination of a Financial Forecast Is a Professional Service

question 70

Multiple Choice

An examination of a financial forecast is a professional service that involves

• A) Compiling or assembling a financial forecast that is based on management's assumptions.
• B) Limiting the distribution of the accountant's report to management and the board of directors.
• C) Assuming responsibility to update management on key events for one year after the report's date.
• D) Evaluating the preparation of a financial forecast and the support underlying management's assumptions.

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Definitions:

Journal Entries

Records of financial transactions in accounting, indicating the accounts affected, amounts, and descriptions of transactions.

Treasury Stock

Shares that were issued and subsequently reacquired by the company, reducing the amount of outstanding stock on the market.

Common Stock

An equity security that represents ownership in a corporation, giving shareholders the right to vote on corporate matters and receive dividends.

Stock Transfer Agent

A third-party firm hired by a company to track and manage its stockholders and transactions, including transfers and issuance of stock certificates.