SU 18

Question 1

What is pro forma financials?

Answer 1

Show the effects of an event on the financials IF the event had happened. So the event has not happened. The statements are hypothetical.

Question 2

FACTS on pro forma financial information.

Answer 2

Must be included as part of regular complete financial statements that have been audited, reviewed, or compiled. And a summary of significant assumptions should be included. The accountants report must also be included.

Question 3

Samples of pro forma situations

Answer 3

Business combination
Change in capitalization
Sale of a large part of the business
Sale of stock

Question 4

Independence

Answer 4

Independence is not required for a compilation of PFFI, but lack of independence requires a modification of the report.

Question 5

Assurance

Answer 5

No assurance is provided by the auditor on PFFI.

Question 6

Compilation vs Preparation

Answer 6

Compilation the accountant provides a report and they give their name, and sign the report…not so with a preparation.

Question 7

1. SSAR refers to who?
2. SSAE refers to who?

Answer 7

1. Non-issuers
2. Issuers

Question 8

Another way of saying inquiry in questions

Answer 8

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