What is Pro forma financial information?
In short
Pro forma financial information shows how historical financial statements might have looked if a significant transaction, such as an acquisition, had occurred earlier. A practitioner can examine or review it under the attestation standards.
Key takeaways
- The historical statements it is based on must have been audited or reviewed.
- The practitioner evaluates whether the assumptions and adjustments are appropriate and correctly applied.
- It doesn't predict actual future results.
Where it's tested
AUD: Attestation & System and Organization Controls (SOC) Engagements — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A user auditor wants to rely on controls at a service organization for the entire audit period. Which report provides appropriate evidence?