FIN 307 Grantham University Preparing Pro Forma Statements Questions

Question Description

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Discuss the simplified procedures  used to prepare and evaluate the pro forma income statement and the pro  forma balance sheet. What ethical issues do you believe are present in  these procedures and how does the SOX Act address these concerns? In  your response, you should also discuss the judgmental approach. 

Prompt #2

Simplified approaches for  preparing pro forma statements assume that the firm’s past financial  condition is an accurate indicator of the future. There are several  examples from the past where organizations were not accurately reporting  their financial information. Discuss the relationship between the  external auditor and the organization. What steps have been taken to  ensure that the relationship is truly neutral and no bias is shown by  the external auditing firm