Describe at least four major limitations of financial statement information.
Answer to relevant QuestionsIt is difficult to measure the business performance of a company in the short run using only cash flow measures because of timing and matching problems. Describe each of these problems and cite at least one example for each.What are the two basic economic concepts of income? What implications do they have for analysis?Fair values are market-based measurements not entity-specific measurements. Explain with an example.Explain how accounting concepts and standards, and the financial statements based on them, are subject to the pervasive influence of individual judgments and incentives.What factors and incentives motivate companies (management) to engage in earnings management? What are the implications of these incentives for financial statement analysis?
Post your question