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Hello!
My query is regarding qn 2 (b) of the above stated question.
In addition to the examiner’s answers can we further add the following evidences:
– Copies of management notes on the computation of cash flow forecast for the 1 year period, and reviewing the cash balance plans generated to be $1.7 m by 31/8/X9.
– Copies of aged receivables analysis and any plans/workings done on achieving the target of 60 receivable days.
– Copies of market statistics report reviewing the demand for cars in the market. Is the demand for cars going to increase following increase in revenue of 25%?
Tell me where I could be wrong or maybe need some correct statements.
Thank you.
Your first two points are dealt with in the suggested answer –
– Notes from meetings … what you want to get out of that is the key assumptions behind the forecast – this would include assumption about receivable days
In the answer “corroborating evidence of assumptions” could have said “e.g. comparing target 60 days with current average collection period (108 days)”. It’s this that would be the evidence rather than “copies of …”.
Your last point is not dissimilar to the point about market research so that would earn similar credit – but you don’t need to say “copies of …”
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