Probing Into Accounting Analysis Of Financial Accounting Report

Financial accounting report analysis can be divided into accounting analysis and financial analysis.

In theoretical research and practical work, people often focus on financial analysis and ignore accounting analysis, or confuse the two, which is not conducive to the development of accounting analysis.

From the difference between accounting analysis and financial analysis, this paper probes into the basic contents of accounting analysis and several problems that should be paid attention to in its application, so as to promote theoretical research and practical application in this field.

The difference and connection between accounting analysis and financial analysis can be defined as "financial reporting is used to analyze the business data calculated by the enterprise, and then to judge the management activities of the enterprise's operation content".

Through accounting analysis, people can evaluate the degree of Accounting Reflection of an enterprise's operation, know the distortion of accounting figures, and correct the distortion through accounting means. By confirming the flexibility of accounting, we can evaluate the appropriateness of accounting policies and accounting.

Obviously, there are obvious differences between financial analysis and accounting analysis.

Financial analysis focuses on business risk and profitability; accounting analysis focuses on the authenticity and integrity of accounting data and the relevance of accounting information.

The main body of the analysis is different.

From the analysis of the practice of practice, the main body of financial analysis is twofold. Apart from the enterprise itself, it also includes all external entities that have stakes in the enterprise. Most of the accounting analysis entities are single, namely, all external entities who are interested in the enterprise.

The methods of analysis are different.

Financial analysis, while analyzing the overall indicators that affect the financial situation, should also carry out the analysis of a certain level of internal indicators, and propose measures to improve operational activities based on the conclusions of the analysis.

Accounting analysis mainly analyzes individual accounting data and their links based on human assumptions. Generally speaking, it does not propose specific requirements for financial accounting reporting providers based on analysis conclusions.

(4) the factors that affect the quality of analysis are different.

Financial analysis is mainly influenced by the external market environment and the quality of the analysts themselves. Accounting analysis is mainly influenced by the accounting standards, the requirements of fair disclosure and the professional judgement ability of the analysts.

There are also interactions and interactions between accounting analysis and financial analysis. This interaction and interaction is becoming more and more obvious with the increasing demand for financial and accounting information.

Financial analysis is mainly the calculation, analysis, comparison, interpretation and evaluation of enterprise accounting information, which is reflected through financial accounting reports.

If the financial accounting report can not clearly reveal the important accounting policies adopted in the preparation of these reports, users of financial accounting reports must rely on accounting analysis methods to make a reliable judgement of these contents.

Reliable accounting analysis is related to the quality of financial analysis and the correctness of relevant financial decisions; in turn, the requirements for improving the reliability of financial analysis conclusions also put forward higher requirements for accounting analysis, which will certainly promote the quality of accounting analysis.

Two, the basic content of accounting analysis, 1., identify the key factors.

The industry's characteristics and its own competitive strategy determine the key factors and main risks of its success. In the accounting analysis, it is necessary to identify and evaluate the policies and data related to the determination of key factors and risks.

For example, the leasing industry is mainly to accurately predict the residual value of rental equipment at the end of the lease term; the key factors for the success of the banking industry are interest and credit risk management; inventory management is a key factor in the retail industry.

In each case, the analyst must determine the accounting measurement method used by the enterprise to control the business concept, the policy of implementing the measurement method and the main data information.

2. evaluation of accounting policy and accounting flexibility.

The choice of accounting policies and accounting methods is embodied in many aspects. If managers have no flexibility in choosing the key accounting policies and the use of these policies, accounting data may have no data value for understanding the situation of enterprises.

On the contrary, if managers have sufficient flexibility in selecting and applying these accounting policies, accounting data will have intelligence value.

For example, the problem of estimating and apportionment is the need to choose accounting policies. The division of accounting periods has an important influence on accounting.

Because of the phasing of accounting, the difference between this period and the current period is generated.

It is precisely because of the difference between this period and the current period that accounting personnel can not estimate the cost of inventory, income tax and other related revenues and expenditures. Based on the principle of proportionate, accounting personnel need to decide on the basis for determining the expenses of certain branches (such as advertising fees, repair fees, etc.) during the annual period before the beginning of an accounting year.

In order to make the apportionment results in a reasonable ratio with the income and reflect the essence of the cost truly, the choice of the basis of allocation is quite important.

If estimates and judgments are incorrect, or adulterated with personal bias and subjectivity, the quality of financial accounting reports will be greatly reduced, even to the users of information.

3. evaluation of accounting information disclosure.

It is reasonable to say that as long as there is both supply and demand of accounting information, accounting information can be fully supplied, but there are three factors leading to market failure: (1) because the nature of public goods of accounting information makes it externality, information providers can not make all information users pay, so enterprises will reduce information production, because production costs can not be fully compensated.

(2) in view of the irrationality of investors and the inability to fully grasp the analytical data, the enterprises with poor economic returns may make more false information, which in turn force the good economic enterprises to add information costs to win customers.

Accounting information is uneven or asymmetric.

Although the relevant accounting standards require the minimum disclosure, managers still have great choice. Therefore, the quality of disclosure is an important aspect of accounting quality.

When evaluating the quality of accounting information disclosure, the company should analyze the following questions: whether the disclosure of the enterprise is sufficient to evaluate its business strategy and effectiveness; whether the notes in the report are sufficient to clarify its accounting policies and assumptions and their logical relationship; whether they have adequately explained the business status of the enterprises; if the accounting management restricts the enterprises to rationally evaluate their success factors, whether the enterprises provide additional disclosures to facilitate users to understand these factors; if the enterprises carry out diversified operation, whether the disclosure of each part of the business is adequate, how can the enterprises cope with the unfavorable situation, and whether there is sufficient disclosure of poor performance.

4. correction of accounting distortions.

The commonly used method of accounting quality analysis is to find signs of problems in accounting quality. Analysts should conduct close examination of specific items or collect more information about them.

Some common signals are: unexplained changes in accounting policies, especially when business performance is poor; unexplained increase in profits; abnormal growth in accounts receivable and inventories compared with sales growth; widening gap between business profits and operating cash flows, or between reporting profits and taxable profits; the use of financing mechanisms and the use of financial instruments; the cancellation of unanticipated large assets; inadequate audit opinions or changes in independent auditors.

It is worth noting that some signals may have multiple explanations, some of which are based on business reasons, which do not necessarily indicate the existence of enterprise accounting problems.

Therefore, we should take signal analysis as the starting point for further study, not the end point.

If the accounting analysis indicates that the data submitted by the enterprise are misleading, analysts should correct them so as to minimize the distortion of information.

Three, accounting analysis should pay attention to the problem of 1..

From the perspective of analysts, prudent accounting policies are not equal to "good" accounting policies. Very poor accounting policies are not necessarily problematic. Changes in accounting policies do not always stem from the adjustment of profits by management.

No matter how flexible the managers are in determining their key success factors and risks, they still have some flexibility in accounting policy.

Each alternative accounting method has its own rationalization. As long as the accounting method is fully disclosed by the enterprise, it can explain and eliminate the incomparable factors in horizontal and vertical comparison.

2. analysis of managerial flexibility in accounting.

At this time, we should pay attention to the following strategic issues: whether the accounting policy of enterprises is consistent with the general practice of the industry; if it is inconsistent, is it because of the flexibility of the competitive strategy of the enterprise, whether the enterprise has changed the accounting policies and assumptions, what the reasons are and what causes it; whether the past accounting policies and assumptions of the enterprises are in line with the facts; whether the enterprises have significant pactions (especially related party pactions) in order to achieve certain accounting objectives.

When examining how to use accounting flexibility, managers should pay special attention to whether management has a tendency to abuse accounting flexibility.

3. accounting environment constraints.

The accounting standards stipulate the basic requirements for accounting recognition, measurement, processing and arrangement, as well as the provision of accounting information to the outside world. However, the influence of the wide applicability of the norms and certain established principles of the accounting standards will also cause false accounting information.

For example, the application of prudence principle may make asset valuation lower than real cost. Liabilities are estimated to be higher than the actual amount. Unrecognized income is realized in the future, and losses considered will not occur in the future.

These are the points that should be fully considered in accounting analysis.

4., accounting personnel's own factors.

Many accounting pactions depend on the professional experience, knowledge level and actual control ability of accountants. The judgments of accountants who have different experience and knowledge background are often different, which inevitably leads to uncertainty in practical operation.