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Hello Mr Mike,
Hope you are fine.
Would you please answer my questions about PFI (Prospective Financial Information) subject:1- Which statements are considered as PFI? I mean it is just prospective SoFP & SoPoL & Cashflows statement or it could also include other statements? If yes, like what else?!
2- Who is responsible for preparation of PFI? As far I have understood, the managers should prepare the PFI and the auditor should only review them and provide a negative assurance! Is it correct ??
3- So if auditors ONLY review the PFI which is prepared by the managers, then why it may create self-review, self-interest and advocacy threats ?!! Auditors are just reviewing PFI not preparing them!!!
Thank you in advance,
Kind RegardsI’m not sure that I could think of any statements other than those that you mentn as qualifying for inclusion within the expression “prospective financial information”!
Fundamentally it’s the client (you’re calling them “managers”) that is responsible for the preparation and the auditor will review and express negative assurance
So, just the same as for the financial statements of entities around the world. However, the HUGE majority of entities around the world do not employ staff capable of preparing financial statements!
So the entity will ask the audit firm if they will prepare these financial statements but there are only very limited situations when that can be acceptable.
However, the preparation of prospective financial information is not a forbidden fruit so far as the audit firm is concerned and, if the audit firm is asked to assist in the preparation of prospective financial information, then why not?
OK?
Can I say any other word instead of “OK” after your perfect explanation 🙂 !!!!!!
Many thanks! 😉
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