What is the purpose of examining prospective financial statements according to AICPA guidelines?

The purpose of examining prospective financial statements, according to AICPA guidelines, is to express an opinion on their conformity with guidelines and assumptions under which they were prepared. This examination involves evaluating whether the assumptions used in creating these financial projections are reasonable and whether the financial statements themselves are presented in accordance with the specified framework.

When an auditor conducts this examination, they focus on the reasonableness of the underlying assumptions and whether they are appropriately disclosed. The goal is to provide users of the statements with a level of assurance that the projections have been prepared following established standards and that they reflect potential future outcomes based on the assumptions made.

Examining prospective financial statements is distinctly different from verifying historical data or assessing future operational capacity, as it centers on providing assurance regarding the appropriateness of the assumptions used in the forecasts. Additionally, while recommendations for modifications to financial strategies may be a beneficial byproduct of the analysis, it is not the primary purpose of examining these statements. The core intent is to deliver an opinion on how well the statements conform to the guidelines, ensuring their integrity for stakeholders who rely on them for decision-making.