 |
| |
|
|
| |
SAS
No. 19
The Examination
of Prospective Financial Information |
|
| |
|
|
| |
 |
|
| |
 Status |
|
| |
|
|
| |
Issued by Auditing Standards Committee in Taiwan on
16 October, 1990. |
|
| |
|
|
| |
Summary |
|
| |
|
|
| |
Prospective financial information relates to events and actions that
have not yet occurred and may not occur. While evidence may be
available to support the assumptions on which the prospective
financial information is based, such evidence is itself generally
future oriented and, therefore, speculative in nature, as distinct
from the evidence ordinarily available in the audit of historical
financial information. The auditor is, therefore, not in a position
to express an opinion as to whether the results shown in the
prospective financial information will be achieved. |
|
| |
|
|
| |
The auditor should obtain a sufficient level of knowledge of the
business to be able to evaluate whether all significant assumptions
required for the preparation of the prospective financial
information have been identified. |
|
| |
|
|
| |
The auditor should consider the extent to which reliance on the
entity’s historical financial information is justified and the
period of time covered by the prospective financial information. |
|
| |
|
|
|
|
When the auditor is assessing whether the client’s preparation and
disclosure of prospective financial information is appropriate, the
auditor should perform necessary procedures to determine:
(a) Whether the prospective financial information is properly
prepared from management’s assumptions;
(b) Whether the calculation of all amounts on the prospective
financial information is accurate;
(c) Whether the relationships among all assumptions are reasonable;
(d) Whether the prospective financial information is prepared on a
consistent basis with historical financial statements, using
appropriate accounting principles.
(e) Whether the presentation of the prospective financial
information is in accordance with generally accepted accounting
principles; and
(f) Whether all assumptions have been properly disclosed. |
|
| |
|
|
| |
The auditor should obtain written representations from management
regarding the intended use of the prospective financial information,
the completeness of significant management assumptions and
management’s acceptance of its responsibility for the prospective
financial information. |
|
| |
|
|
| |
Because of the nature of uncertainty, sensitivity, and correlation
of the prospective financial information, the auditor shall not
issue a qualified-style report for the examination. |
|
| |
|
|
| |
When the auditor believes that the presentation and disclosure of
the prospective financial information is not adequate, the auditor
should issue an adverse-style report on the prospective financial
information. |
|
| |
|
|
| |
When the auditor believes that one or more significant assumptions
do not provide a reasonable basis for the prospective financial
information prepared on the basis of best-estimate assumptions or
that one or more significant assumptions do not provide a reasonable
basis for the prospective financial information given the
hypothetical assumptions, the auditor should issue an adverse-style
report on the prospective financial information. |
|
| |
|
|
| |
When the examination is affected by conditions that preclude
application of one or more procedures considered necessary in the
circumstances, the auditor should issue a disclaimer-style report
and describe the scope limitation in the report on the prospective
financial information. |
|
| |
|
|
|
 Effective
date
|
|
|
|
|
|
|
|
This Statement is effective for audit of financial statements with
fiscal years ending on or after 31 December, 1990. |
|
|
|
|
|
|
|
|
