CFA Level I · CFA Level I Exam · Introduction to Financial Statement Analysis
Which of the following sources of information would an analyst most likely consult to learn about the accounting policies and estimates used by a company?
The notes to the financial statements are the best source, because they disclose significant accounting policies, estimates and judgments used in preparing the statements. Share price history and sell-side forecasts do not describe the company's accounting choices.
- ANotes to the financial statementsCorrect
- BThe company's share price history
- CA sell-side analyst's earnings forecast
Explanation
The notes (footnotes) disclose the significant accounting policies, estimates and judgments. Share price history and analyst forecasts do not describe the policies the company applies.
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