LEARNING OUTCOMES

The candidate should be able to:

1. describe the roles of financial reporting and financial statement analysis;

2. describe the roles of the statement of financial position, statement of comprehensive income, statement of changes in equity, and statement of cash flows in evaluating a company’s performance and financial position;

3. describe the importance of financial statement notes and supplementary information—including disclosures of accounting policies, methods, and estimates—and management’s commentary;

4. describe the objective of audits of financial statements, the types of audit reports, and the importance of effective internal controls;

5. identify and describe information sources that analysts use in financial statement analysis besides annual financial statements and supplementary information;

6. describe the steps in the financial statement analysis framework.