Detailed Answer
(a) The requirement is to identify the statement that
should be included in a compilation report on a financial forecast.
Answer (a) is correct because the report should state that the
compilation does not include evaluation of the support of the
assumptions underlying the forecast. Answer (b) is incorrect
because no such statement is included in a compilation report,
and because hypothetical assumptions pertain to financial projections,
not financial forecasts. Answer (c) is incorrect because the
report makes no statement concerning the range of assumptions.
Answer (d) is incorrect because the statement is not included in
the report, and because the prospective statements are managements,
not the accountant’s, representation.