There are five areas that Robinson, Henry, Pirie, and Broihahn (2015) suggest that there are potential warning signs inherent in financial reports. In particular, there are five areas to pay attention to:
Signals from inventories
Capitalization policies and deferred costs
Relationship of cash flow and net income
Other warning signs
In your paper,
Choose five of the choices from Exhibit 22 and analyze how those choices have impacted your company.
Review your company’s annual report for any warning signs based on the five warning signs from section 4.3.
Discuss the ramifications of this warning sign to the financial reporting quality of the company if there is a warning sign present.
Support your findings with support from the text if there are not any warning signs present.