Transparency and Other Issues in Financial Statement Analysis: Uncovering Misleading Metrics and Avoiding Financial Shenanigans

One of the cornerstones of financial statement analysis is the discounted cash flow valuation. Despite the broad use of this valuation technique, and the economic importance of employee stock options to firm values, there is little guidance on how employee stock options should be incorporated in a valuation. This paper provides a comprehensive approach to doing so, including consideration of the income tax implications of option exercises, the simultaneity of equity and option valuation, and the use of the disclosures that were mandated recently by Statement of Financial Accounting Standards No. 123. The paper provides a comprehensive example using Microsoft's fiscal 1997 financial statements and employee stock option disclosure. This paper should be of interest to academics and practitioners involved in corporate valuation and financial statement analysis.

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Taking the Pulse of the Real Economy Using Financial Statement Analysis: Implications for Macro Forecasting and Stock Valuation

SSRN Electronic Journal ◽

10.2139/ssrn.2365633 ◽

2013 ◽

Author(s):

Yaniv Konchitchki ◽

Panos N. Patatoukas

Keyword(s):

Financial Statement ◽

Real Economy ◽

Financial Statement Analysis ◽

Stock Valuation ◽

The Real

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Who’s the BOSS? Analysis of a Fraud

Journal of Forensic Accounting Research ◽

10.2308/jfar-2020-022 ◽

2021 ◽

Author(s):

Eileen Z. Taylor

Keyword(s):

Student Engagement ◽

Real World ◽

Financial Statement ◽

Accounting Students ◽

Work Experiences ◽

Red Flags ◽

Financial Statement Fraud ◽

Financial Statement Analysis ◽

News Stories ◽

Public Company

Based on a real world, public company, $30 million embezzlement and financial statement fraud, this case helps students recognize red flags, analyze a situation using the fraud diamond, perform research and reflect on their own work experiences to support a belief, and conduct financial statement analysis. Its variety of activities are suitable for both undergraduate and graduate accounting students, and in-class and out of class learning. Because it is based on an actual fraud, it includes an epilogue with links to news stories and court documents, which improves student engagement with the material.

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