AAA – L3 – SA – Q5.9 – Audit-related services

Which term is not associated with prospective financial information?

Question

Which of the following terms is NOT normally associated with prospective financial information?

A Hypothetical assumptions

B Sensitivity analysis

C Projections

D Assertions

Answer

Explanation: Prospective financial information involves hypothetical assumptions (A), sensitivity analysis (B), and projections (C), which are used to forecast future financial outcomes. Assertions (D) are associated with historical financial statements, not prospective information, as they relate to management’s claims about financial data.

Tags: assumptions, Projections, Prospective financial information, Sensitivity Analysis
Level: Level 3

Topic: Audit-Related Services

Uploader: Salamat Hamid