MindMap Gallery CFA Financial Statement Analysis Accounting Fundamentals (Test Points 1-5)
CFA Financial Statement Analysis Accounting Fundamentals (Test Points 1-5) I compiled it when I was preparing for the exam. I hope it can help those who are preparing for the exam. Please forgive me if there are any typos.
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This is a mind map about bacteria, and its main contents include: overview, morphology, types, structure, reproduction, distribution, application, and expansion. The summary is comprehensive and meticulous, suitable as review materials.
This is a mind map about plant asexual reproduction, and its main contents include: concept, spore reproduction, vegetative reproduction, tissue culture, and buds. The summary is comprehensive and meticulous, suitable as review materials.
This is a mind map about the reproductive development of animals, and its main contents include: insects, frogs, birds, sexual reproduction, and asexual reproduction. The summary is comprehensive and meticulous, suitable as review materials.
CFA Financial Statement Analysis Accounting Fundamentals (Test Points 1-5)
1. Financial reports and financial statements
1.1 Purpose of financial reporting: provide information to wide range of inerested parties
1.2 Information provided
financial position
financial performance
changes in financial position
1.3 Contents of financial reports
financial statement
balance sheet
Note: Debt only refers to interest-bearing liabilities; liability also includes non-interest-bearing liabilities.
statement of comprehensive income
cash flow statement
statement of changes in equity
footnotes
supplementary information
management discussion and analysismanagement analysis discussion
auditor's report audit report
…
other information
proxy statement
conference call conference call minutes
…
2. Financial report composition
2.1 Balance sheet
A=LE
current financial position
2.2 Income statement
income-expenses=net income
over a period of time
"net income"="bottom line" in the income statement
2.3 Cash flow statement
over a period of time
Three types of cash flow
operating:CFO
investing:CFI
financing:CFF
2.4 Statement of changes in owners’ equity
2.5 Report linkage relationship
Core Report: Balance Sheet
BASE rule: B A-S=E
Ending R/E=Beginning R/E net income-dividend
Ending cash=Beginning cash cash inflow-cash outflow
2.6 Notes to statements
footnotes must be audited
3. Audit report and audit opinion
Characteristics of audit opinion
independent review independent opinion
assure reasonably assure
Type of audit opinion
Unqualified OpinionUnqualified Opinion
Qualified Opinion reserved opinion (not good in certain aspects)
Adverse Opinion (with material misstatement)
Disclaimer of Opinion Unable to express opinion (audit scope limited)
4. Accounting standard setting entities and regulatory agencies
standard-setting bodies standard-setting bodies
FASB:U.S.GAAP
IASB: IFRS
Regulatory Authority
United States: SEC
Form 10-K: annual report, audited and required to be audited
Form 10-Q: quarterly report, not necessarily audited, no audit required
International: IOSCO
5. Report quality requirements
5.1 Financial statement quality characteristics
Basic Features
1.relevanceRelevance
2.faithful representation credibility
completecomplete
neutral Seeking truth from facts
free from error
Supplementary features
3.comparability comparability
4.verifiability verifiability
5.timeliness
6.understandability understandability
5.2 General requirements for financial statements
going concern basis going concern assumption
accrual basis of accounting accrual basis
Accounting adjustments
change in accounting estimate change in accounting estimate - prospective application method
change in accounting policies change in accounting policies—retrospective retrospective adjustment method
correction of an error error correction - restatement