Prospective financial information (PFI) are information based on assumption about events that may occur in the future and possible action by the entity. it can be forecast (PFI based on assumptions to future events which management expect to take place and action management expect to take) or projection (PFI based on hypothetical assumption about future events and management action, a mix of best estimates and hypothetical assumption).
The following are matters which audit firm should consider before accepting an engagement to report on prospective financial information
- The intended use of information . for example is it intended for internal or external use.
- Whether the information will be for general or or limited distribution
- The nature of assumption on which the information is based
- The information to be included
- The period to be covered by information.