- November 2, 2019 at 12:13 pm #551440vavneetbParticipant
- Topics: 172
- Replies: 122
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?November 2, 2019 at 1:44 pm #551444Kim SmithKeymaster
- Topics: 115
- Replies: 7673
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.
- You must be logged in to reply to this topic.