• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Verifying Cash Flow forecast!

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Verifying Cash Flow forecast!

  • This topic has 1 reply, 2 voices, and was last updated 12 years ago by MikeLittle.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • May 23, 2013 at 2:38 pm #126879
    muhammadsaad
    Member
    • Topics: 4
    • Replies: 10
    • ☆

    Hi Mike,

    Can you provide me the framework to verify the cash flow forecast ?
    Thanks

    May 23, 2013 at 4:23 pm #126909
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23323
    • ☆☆☆☆☆

    Oh! I thought that was covered in notes / lectures.

    All we are able to do really is confirm the reasonableness of the underlying assumptions and assure ourselves that they are realistic.

    It’s often the case that a Cash Flow Forecast will show exactly what the preparer wants it to show …. and if it doesn’t, then the preparer will tweak it. The client is not going to show the bank / prospective lender a forecast which is gloomy and pessimistic so Cash Flow forecasts are most unlikely to present that picture.

    It’s going to be bullish and smiley-faced and exciting and ( claimed to be ) realistic

    The auditor will have to put on his cap / her hat of considerable professional scepticism

    We can, in some cases, confirm that the first month or so of the forecast has actually happened, and we can confirm the opening receivables / payables to support the forecast flow from these bodies. We can also confirm the opening balance at the bank which is the start point.

    Levels of sales and production can be seen to be (un) realistic given our knowledge of the history of sales and production capacity. Numbers of employees and wage rates can be re-computed and one off items like dividends and tax payments can be checked to see that they are included and reasonably calculated / forecast.

    We can check to see that non-cash items like depreciation have not been included.

    We should check the accuracy of the arithmetic

    But, overall, it’s a check on the reasonableness of the assumptions used as well as the reason for the forecast, the target audience and, importantly, the integrity and historic success of the preparer in their previous forecasts

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • kennedyavege@2023 on Relevant Cash Flows for DCF Relevant Costs (example 1) – ACCA Financial Management (FM)
  • mrjonbain on ACCA BT Chapter 6 – Some legal obligations – Questions
  • Ken Garrett on ACCA BT Chapter 6 – Some legal obligations – Questions
  • Ken Garrett on The nature and structure of organisations – ACCA Paper BT
  • OmarAlbeity on ACCA BT Chapter 6 – Some legal obligations – Questions

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in