Reading 11
Evaluating Quality of Financial Reports
5 modules 26 min
0/5
Exam Focus
It is important for an analyst to evaluate the quality of a company’s financial reports before relying on the reports for information to make investment decisions. Financial reports can be low quality due to non compliance with accounting standards, fraud, bias, and other factors.
Modules
- Module 11.1Quality of Financial ReportsDemonstrate the use of a conceptual framework for assessing the quality of a company’s financial reports. · Explain potential problems that affect the quality of financial reports.7 min · 2 LOS
- Module 11.2Evaluating Earnings Quality, Part 1Describe how to evaluate the quality of a company’s financial reports. · Evaluate the quality of a company’s financial reports. · Describe indicators of earnings quality. · Describe the concept of sustainable (persistent) earnings.8 min · 4 LOS
- Module 11.3Evaluating Earnings Quality, Part 2Explain mean reversion in earnings and how the accruals component of earnings affects the speed of mean reversion. · Evaluate the earnings quality of a company.5 min · 2 LOS
- Module 11.4Evaluating Cash Flow QualityDescribe indicators of cash flow quality. · Evaluate the cash flow quality of a company.3 min · 2 LOS
- Module 11.5Evaluating Balance Sheet QualityDescribe indicators of balance sheet quality. · Evaluate the balance sheet quality of a company. · Describe sources of information about risk.3 min · 3 LOS