Beruflich Dokumente
Kultur Dokumente
Chapter 3:
1. The institutional framework of
accounting
2. Factors that influence accounting quality
3. The steps in accounting analysis
4. Accounting analysis pitfalls
5. The value of accounting information
Chapter 4:
6. How to implement accounting analysis
Reporting standards
External auditing.
Flash Points:
Product liability: quality of estimated liabilities
Error is More Equipment leasing Lease values: quality of carrying values for leases
Increases in the gap between net income and cash flows or taxable
income
Use of R&D partnerships, SPEs or the sale of receivables to finance
operations
Unexpected large asset write-offs
Related-party transactions.
22319 Financial Statement Analysis 23
Flash Points: Institutional Situations Where
Manipulation is More Likely
______________________________________________________________________________
Year of Year after IPO
Diagnostic (%) IPO 1 2 3 4 5 6
______________________________________________________________________________
Net income/sales 4.6 2.8 2.1 1.6 1.3 1.3 1.8
Abnormal accruals/book value 5.5 1.6 -0.4 -0.8 -2.0 -1.4 -2.7
Source: R. Sloan, "Do Stock Prices Fully Reflect Information in Accruals and Cash Flows About Future Earnings?"
Accounting Review 71 (1996), p. 312.