CFA Level I · CFA Level I Exam · Introduction to Financial Statement Analysis
Which of the following sources of information is most likely to give an analyst management's discussion of known trends, risks and liquidity that is absent from the audited financial statements themselves?
Management commentary is most likely the source. It presents management's discussion of trends, risks, liquidity and outlook, which the primary statements do not provide. The auditor's opinion addresses fair presentation only, and the statement of changes in equity is part of the financial statements.
- AAuditor's opinion
- BManagement commentaryCorrect
- CStatement of changes in equity
Explanation
Management commentary (MD&A) covers management's view of results, trends, risks, liquidity and capital resources. The auditor's opinion only gives assurance on whether the statements are fairly presented. The statement of changes in equity is itself a primary financial statement.
Did you get it right without looking?
One question tells you little. A timed set on Introduction to Financial Statement Analysis shows your real accuracy, how long you take and where you lose marks.
More Introduction to Financial Statement Analysis questions
- An analyst reads an auditor's report that states the financial statements present fairly, in all material respects, the company's position i…
- In the financial statement analysis framework, the step an analyst performs immediately after collecting input data and before analyzing the…
- In the financial statement analysis framework, which activity most likely comes first in the process?
- Compared with a standard unqualified auditor's report, an auditor's report that includes a key audit matters section most likely:
- An auditor concludes that a company's financial statements are presented fairly in all material respects in accordance with IFRS. The type o…
- Under IFRS, which of the following items is most likely presented in the statement of financial position as a non-current liability?