D is corrent because the professional standards state that the party normally responsible for assumptions identified in prospective financial statements is management. However, in limited circumstances, a responsible party can be persons outside of the entity, such as a party considering acquiring the entity.
A is incorrect because the client’s independent auditor is not considered a party normally responsible for the assumptions identified in prospective financial statements.
B is incorrect because reporting accountants are not considered parties normally responsible for the assumptions identified in prospective financial statements.
C is incorrect because a third-party lending institution is not considered a party normally responsible for the assumptions identified in prospective financial statements.
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