Review of the reasonableness of financial forecasts

The review of the reasonableness of financial forecasts involves forming an independent professional opinion on whether the financial forecasts prepared by management are reasonable.

What we can review:

• the entity's financial forecast model;
• the financial model of an investment project;
• the entity's financial model prepared in accordance with the requirements of banks and development institutions;
• special-purpose financial forecasts used for management decision-making.

The auditor's primary objective is to examine the reasonableness of the forecasts prepared: to express an opinion on whether the assumptions adopted in the model are not unreasonable, whether the prospective financial information is properly prepared on the basis of those assumptions, and whether it is presented in accordance with the applicable financial reporting framework.

The service is designed for shareholders (founders), senior executives, and regulatory authorities with supervisory and oversight functions.

The review conducted by the audit firm includes:

• assessment of the quality and reliability of source data;
• assessment of the assumptions and hypotheses adopted and their reasonableness;
• identification of misstatements in the methods used and in the forecasts prepared;
• evaluation of the appropriateness of the disclosure of financial information to intended users;
• analysis of compliance with established requirements and recommendations.

The examination of prospective financial information is conducted in accordance with International Standard on Assurance Engagements (ISAE) 3400 "The Examination of Prospective Financial Information".

Based on the assessment results, the audit firm issues a report setting out its conclusions on the work performed and recommendations to address any identified deficiencies. The report gives users significantly greater confidence in the reliability of the forecast information and enables them to draw well-founded conclusions.

The work performed aims to eliminate errors and potential manipulation of forecast data, which in turn:

• improves quality of the financial forecasts prepared;
• reduces risks associated with the use of unreliable data in management decision‑making;
• strengthens trust from potential investors, banks, partners, and clients.