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    Procedures For PFI by Alan Biju Palak ACCA

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    Darkwarp
    The document outlines examination procedures for a projected financial information (PFI) engagement, including: 1) Recalculating forecast financial statements and assessing consistency of accounting policies and compliance with standards. 2) Comparing current forecasts to prior period actual results and inquiring about significant variances. 3) Performing analytical procedures to assess forecast reasonableness. 4) Considering forecast trends in light of management's business knowledge and current economic conditions.

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    Procedures For PFI by Alan Biju Palak ACCA

    Uploaded by

    Darkwarp
    133 views2 pages
    The document outlines examination procedures for a projected financial information (PFI) engagement, including: 1) Recalculating forecast financial statements and assessing consistency of accounting policies and compliance with standards. 2) Comparing current forecasts to prior period actual results and inquiring about significant variances. 3) Performing analytical procedures to assess forecast reasonableness. 4) Considering forecast trends in light of management's business knowledge and current economic conditions.

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    Procedures for PFI by Alan Biju Palak ACCA

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    The document outlines examination procedures for a projected financial information (PFI) engagement, including: 1) Recalculating forecast financial statements and assessing consistency of accounting policies and compliance with standards. 2) Comparing current forecasts to prior period actual results and inquiring about significant variances. 3) Performing analytical procedures to assess forecast reasonableness. 4) Considering forecast trends in light of management's business knowledge and current economic conditions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    133 views2 pages

    Procedures For PFI by Alan Biju Palak ACCA

    Uploaded by

    Darkwarp
    The document outlines examination procedures for a projected financial information (PFI) engagement, including: 1) Recalculating forecast financial statements and assessing consistency of accounting policies and compliance with standards. 2) Comparing current forecasts to prior period actual results and inquiring about significant variances. 3) Performing analytical procedures to assess forecast reasonableness. 4) Considering forecast trends in light of management's business knowledge and current economic conditions.

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    ACCA AAA

    Examination Procedures for PFI


    General procedures
    • Recalculate the forecast financial statements to confirm the arithmetic accuracy.

    • Agreement that the accounting policies used in preparing the forecast statement of profit or loss
    are consistent with those used in historical financial information and comply with IFRS
    Standards.

    Lecture support notes by Alan Biju Palak


    • Consider the accuracy of forecasts prepared in prior periods by comparison with actual results
    and discuss with management the reasons for any significant variances.

    • Perform analytical procedures to assess the reasonableness of the forecast financial statements.

    • Consider the reasonableness of forecast trends in the light of auditor’s knowledge of client’s
    business and the current and forecast economic situation and any other relevant external factors.

    Forecast statement of profit or loss

    • Analytical review followed by discussion with management on the trend in revenue, which
    is forecast to increase/decrease as compared with the prior year.

    • Discuss the reason for the anticipated increase/decrease in revenue(any other item) with
    management, to understand if the increase is due to the any significant factors.

    • Obtain a breakdown of items included in forecast operating expenses and perform an


    analytical review to compare to those included in the prior year figures, to check for any
    omissions.

    • Using the cost breakdown, consider whether depreciation charges have increased in line
    with the planned capital expenditure.

    • Review of capital expenditure budgets, cash flow forecasts and any other information to
    accompany the forecast statement of profit or loss for consistency.

    Tap the link for any queries - alanbiju31@gmail.com


    ACCA AAA
    •  Recalculation of depreciation expense and confirmation that depreciation on the new item
    has been included and correctly calculated and agrees to the forecast statement of financial
    position.

    • Recalculation of finance cost to ensure that interest payable on the new bank loan has been
    included, with confirmation of the rate of interest to bank documentation.

    • Analytical review of the composition of operating expenses to ensure that all expenses are
    included at a reasonable amount.

    Forecast statement of financial position

    Lecture support notes by Alan Biju Palak


    • Agree the increase in property, plant and equipment to an authorised capital expenditure
    budget.

    • Obtain and review a reconciliation of the movement in property, plant and equipment.

    • Perform analytical procedures on working capital and discuss trends with management, for
    example, the movement in receivables days in the forecast and the reason for this should be
    obtained.

    • Agree the increase in long-term borrowings to documentation relating to the new loan, and
    also to the forecast cash flow statement (where it should be included as a cash flow arising
    from financing activities).

    • Discuss the deferred tax provision with management to understand why no movement on the
    balance is forecast, particularly given the planned capital expenditure.

    • Obtain and review a forecast statement of changes in equity to ensure that movements in
    retained earnings appear reasonable.

    • Agree the movement in cash, and the forecast closing cash position to a cash flow forecast.

    Tap the link for any queries - alanbiju31@gmail.com

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