Which of the following procedures is important for assurance on financial forecasts?

Checking the mathematical accuracy of forecasts is crucial for providing assurance on financial forecasts. This procedure ensures that the financial projections are based on correctly calculated figures, which builds confidence in the reliability of the forecasts. Mathematical accuracy involves verifying that the calculations for revenue, expenses, and other financial metrics are executed correctly and consistently, ensuring that they reflect the underlying assumptions and data appropriately.

When this step is rigorously applied, it serves as a foundation for further analysis and validation of the forecasts. It eliminates potential errors that could arise from simple arithmetic mistakes or formula errors, which could significantly impact decision-making and stakeholder trust.

While assessing historical profitability trends, confirming future market conditions, and reviewing external economic reports are all beneficial procedures to contextualize and evaluate the forecasts, they do not directly verify the soundness of the underlying numerical data. Thus, ensuring mathematical accuracy is a fundamental and critical step in the overall assurance process for financial forecasts.