Hi
Q: as part of going concern you have reviewed that cash flow forecast based on the assumptions of significant increases in revenue:
Answer: email correspondence between sales director and potential new customer
-a review of board minutes showing details of new customer won
-A review of the post year end sales and the order book
-A review of post year end sales and order book
-discuss with the management regarding their plans for obtaining new customer
ANSWER- A REVIEW OF POST YEAR END SALES AND ORDER BOOK.
I chosen email correspondence with director and new customer
Doubt: this is a most reliable evidence,no?
Post year end sale and order book- there could be chance that they are just recording transaction just to show high revenue?
Ask the Tutor ACCA AA
Evidence
An order book records sales orders received from customers (that are to be fulfilled at a future date). The mere prospect of a potential customer (who hasn't placed any order yet) would be far less reliable in supporting an assumption about a significant increase in revenue reflected in a cash flow forecast. If there was a signed contract with a new customer that committed to a volume of sales that would be good evidence - but it isn't an option here.
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