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[quote user="CMStPnP"] [quote user="tin can"]Pro-forma statements are a crucial part of any new business model.  It is important to check the projected expenses against real world data to make sure that nothing is missing.  Do the pro-formas match existing industry statements; are all the expenses listed and are they reasonable; are the projections for revenue realistic and obtainable; and many other points to compare?  One of the most important tools for a proposed venture are the what ifs?  What do we do if ridership does not meet expectations?  What do we do if cost overruns deplete available capital?  And so on... [/quote] Bingo!   And that is based on a business model or prototype.   For example before Zappos became an ongoing venture and to prove their forecasts they ordered shoes from area retailers and sold them on the internet as a "prototype" to prove their underlying assumptions and projections.    The biggest one being that consumers would buy shoes on the Internet without being able to handle them, see them or try them on. They didn't just flop out Pro Forma Statements and expect Investors to bite. [/quote] Who said anything about flopping out proforma financial statements, without their being audited? Who said anything about their being prepared in an unprofessional manner? Checking the estimates, assumptions, calculations, formulas, etc. used to develop proforma statements is exactly why one should have them audited by an independent auditor.   The financial statements for an on-going entity are developed from the entity's accounting records. They can be audited and attested to by independent auditors.  Proforma statements cannot be audited in the same way as the financial statements of an on-going entity.  Because of the way they are prepared, the auditors can only verify the appropriateness of the estimates, assumptions, calculations, formulas, etc.  This is the difference between audited financial statements and proforma statements.
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