Page 436 - CA Final PARAM Digital Book.

Author’s Note

Refer note after QNO – 743.000

Authors Note

# Mistake point (QNO- 740.000/741.000/742.000/743.000)

Below are the analysis of various questions related to financial forecast. Institute has given different
answers on the basis of words used in the question. However, students usually don’t think about it much
and write a common answer to all the questions related to financial forecast.
Following suggestions can be used to gain maximum marks in questions related to financial forecast and
projected financial statements.
➢ Note 1
When the question only mentions “Chartered Accountant, certifies a financial
forecast/projection of his client”
Here students should try to find in the question whether something is mentioned related to
Vouching the accuracy of the forecast or projections?
• If yes, then answer it accordingly-
• If question states CA Vouches (i.e. SAE 3400 not followed) – Guilty
• If question states CA does not Vouches (i.e. SAE 3400 followed) – Not Guilty

• If nothing is mentioned in the question, then answer it accordingly-
Write a conditional answer that –

• If CA Vouches accuracy for the forecast or projections, SAE 3400 is not
followed– Guilty
• If CA does not Vouches for accuracy of the forecast or projections, SAE 3400
followed– Not Guilty
➢ Note 2
When the question mentions “Chartered Accountant, prepares & certifies a financial forecast
/projection of his client”
Answer should consist of two parts:

• Preparation
Preparing and at the same time examining a financial forecast /projection of his client is
not allowed as per SA 3400 as it says it is the responsibility of management to prepare.
Earlier as per Guidance Note on Accountants Report on Profit Forecasts and/or
Financial forecast it was allowed to prepare an examine at the same time, but this GN is
discontinued after introduction of SAE 3400 in 2007.

• Certification
Same as note 1

➢ Final Conclusion: -
As per SAE-Preparation is not allowed and certification is allowed subject to conditions
specified above.

Second Schedule, Part I, Cl 4 --Evaluation of Cost Old Course-- (N04E, N08R, N14E, PM17, M18E, N20E)
QNO
744.000 is Not Giving Opinion on Financial Statements
TITANIUM CNO – PE.1520
A firm of Chartered Accountants was appointed by a company to evaluate the costs of the various
products manufactured by it for its information system. One of the partners of the firm was a Non-
Executive Director of the company.
OR
A firm of Chartered Accountants was appointed by a company to evaluate the costs of the various
products manufactured by it for its information system. One of the partners of the firm was a Non-
Executive Director of the company. Comment with reference to the Chartered Accountants Act, 1949
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