CASH FLOW
The objective is to ensure that the cash flow projections are prudent and consistent with your knowledge of the business. Reviewing the opening balance sheet and trading projections, you are in a position to review the cash flow projections. This work should not be conducted out of sequence. You cannot review cash flow projections (other than in the very short term) without first reviewing the balance sheets and trading projections.
Perform review of cash flow projections
- The cash flow reflects the following:
- The analysis of the opening balance sheet
- Improved working capital management
- The trading projections during the period
- Any disposals or acquisitions of plant and machinery
- Any introduction or withdrawal of funds of an equity or other source
Assess accuracy and completeness
- Review the cash book and other cash movements to ensure completeness of projections.
- Assess in detail management's plans with respect to capital items.
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