Predicting Future Performance

CPAs typically report historical financial performance. But sometimes they’re hired to predict how a company will perform in the future. There are three types of prospective reports: forecasts, projections and budgets. Though these terms may be used interchangeably, there are important distinctions under the AICPA attestation standards. When predicting future performance, it’s important to look beyond simplistic formulas that are based on historical results.

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