Tiêu đề FSA - Solution.pdf ✅

CFA Program Level I for February 2024 1 FSA (Solution) 1. A. Incorrect. The company's reports are high quarry, but the delay in reporting impairs their usefulness somewhat. The reporting is still better than biased reporting. B. Incorrect. This is an example of decision useful information about a result that may not be sustainable. Reporting is not of the highest quality, but is better than biased reporting C. Correct. Combining the results from two segments is an example of biased reporting, which fails in the middle of the quality spectrum It is difficult to interpret the profitability of each segment when their results are combined Financial Statement Analysis: describe a spectrum for assessing financial reporting quality 2. A. Incorrect because aggressive accounting is a biased choice. Biased accounting choices are higher in quality than earnings management on the spectrum of GAAP conforming financial reports. B. Correct. Earnings management represents deliberate actions to influence reported earnings and their interpretation. The distinction between eamings management and biased choices is subtle and, primarily, a matter of intent. C. Incorrect because conservative accounting í a biased choice. Biased accounting choices are higher in quality than earnings management on the spectrum of GAAP conforming financial reports. Financial Statement Analysis: describe a spectrum for assessing financial reporting quality 3. A. Correct. The exclusion of recurring items from non-GAAP financial measures is strictly prohibited by the SEC and should raise concerns that should raise concerns that additional analysis is needed B. Incorrect. If a company uses non-GAAP measures in is SEC filings, it must display the comparative GAAP measure with equal prominence and provide a reconciliation between the two C. Incorrect. LIFO reporting provides sufficient information in the Notes to convert from LIFO to FIFO so a formal change should not alter an analyst’s opinion about the company.

CFA Program Level I for February 2024 3 C. Incorrect. Motivation results from personal pressures or corporate pressures to report on a low-quality basis. Poor internal controls provide the vehicle through which low-quality reporting can be concealed, not the motivation for it. Financial Statement Analysis: describe motivations that might cause management to issue financial reports that are not high quality and conditions that are conducive to issuing low- quality, or even fraudulent 7. A. Correct because conservatism in which people maintain their prior views or forceasts by inadequately incorporating new information B. Incorrect because overconfidence bias occurs when people demonstrate unwarranted faith in their own abilities C. Incorrect because representative bas refers to the tendency to classify information based on past experiences and known classifications Financial Statement : explain how behavioral factors affect analyst Analysis forecasts and recommend remedial actions for analyst blases 8. A. Incorrect because normalized earnings remove the impact of temporary factors and unusual events such as acquisitions. B. Correct because normalized earings are the expected level of mid-cycle earnings for a company in the absence of any unusual or temporary factors that affect profitability. C. Incorrect because normalized earning are based on mid-cycle eamings, not peak-year earnings. Financial Statement Analysis: explan considerations in the choice of an explol forecast Fonzon and an analyst's choices in developing projections beyond the short-term forecast hortzon 9.