Question

Which of the following kinds of information would not be provided by MD&A?

A. A narrative explanation of the contents of the CAFR.
B. A description of the government's financial condition.
C. A forecast of revenues and expenditures for the next three fiscal years.
D. A discussion of economic factors and the budget and tax rates approved for the next year.

Answer 1

Option C, a forecast of revenues and expenditures for the next three fiscal years, is not typically included in the Management's Discussion and Analysis (MD&A) section of a CAFR. MD&A focuses on past and current financial performance and conditions.

Step-by-step explanation:

The Management's Discussion and Analysis (MD&A) section of a Comprehensive Annual Financial Report (CAFR) typically includes a variety of information regarding a government's financial activities. That said, option C, a forecast of revenues and expenditures for the next three fiscal years, would not typically be provided by the MD&A. The MD&A is aimed at providing a narrative explanation of the financial statements, a discussion of the government's financial condition, and an explanation of significant changes that occurred during the reporting period. It may also discuss economic factors and provide some information on the upcoming fiscal year's budget and tax rates. However, detailed multi-year financial forecasts go beyond the scope of MD&A, as its primary aim is to enhance the user's understanding of the financial statements, condition, and changes during the reported year.