Problem:
An auditor is reporting on an examination of a forecast included in the registration statement for a new issue of securities. The auditor has considered all the key assumptions entering into the forecast, and has concluded that the assumptions developed by management are suitably supported and consistent with the plans of the client company, and provide a reasonable basis for the forecast. The auditor therefore issues a report which, among other things, states that the forecasted amounts are reasonable and achievable under favorable future conditions.
Do you agree or disagree with the auditor's actions and the report? Give reasons.