Final answer:
In an external audit of an industry dependent on government contracts, key forecasts should focus on government stability, policies, especially those concerning national security, international trade, and regulations affecting the industry. The impact of multinational developments on domestic government decisions is also critically important.
Step-by-step explanation:
When an industry relies heavily on government contracts, the most important forecasts in an external audit are often related to the stability and policies of current and future government administrations. This is because changes in government can impact the awarding and continuation of these contracts. Furthermore, forecasts related to the industry's regulatory environment are crucial. Understanding how potential shifts in technology and international trade policies may affect operations are key, as these factors can lead to changes in national security considerations and environmental laws, which in turn influence government procurement decisions.
The importance of analyzing multinational environments cannot be overstated in this context. Governments may alter their stance on imports and outsourcing governance to protect domestic interests, which could limit or expand opportunities for industries reliant on government contracts. Thus, a keen eye on multinational trends alongside governmental policy direction is vital for auditors assessing the long-term viability of government-dependent industries.