Chapter 14 
      Understanding 
     Financial Statements
        The objectives of chapter 14 
       Additional information in annual 
        report
       Review of criteria and concepts
       Accounting alternatives
       Meaning of the financial statement
                                                 14-3
        Information in Annual Reports 
      Primary financial statements: Balance 
       Sheet, Income Statement, Statement of 
       Cash Flows.
      Auditor’s opinion.
      Notes to financial statements.
      Management discussion and analysis.
      Operating segment info.
      Comparative data.
      Optional info on products, personnel, 
       facilities….                               14-4
        Auditors
       Certified public accountants.
       Meet prescribed professional 
        standards.
       Licensed by state.
                                                 14-5
        Auditors’ Opinion
        Results of auditors examination.
        Relates to financial statements and 
         notes, not other parts of annual 
         report.
        Format of auditors’ report 
         determined by American Institute 
         of Certified Public Accountants 
         (AICPA).
                                                 14-6