Financial analysis Essay Example | Topics and Well Written Essays - 6750 words

Financial analysis - Essay ExampleIn case of each kind of misrepresentation found in the financial statements, they shall be soberly liable for not fulfilling their duties and the responsible individual managers are likely to penalize for not being reliable in dealings with the external parties.The parties such as banks and financial institutions that are interested to provide funds to the firm and other individuals interested to invest in the firm or often require threesome parties to attest the financial statements served by the firm for reliance in the education provided.External audit firms, investment bankers and underwriting firms, provide these certification services. Various clients are served by these third parties and thus they are strongly interested in maintaining their reputation and credibility with the financial community.The report provided by these third parties serves as reasonable effrontery in the true and fair disclosure of information in the financial state ments. In case of any discrepancy found in the financial information provided by the firm, the reports on the financial statements shall not be clean. Thus adversely affects the credibility of the firm.In case of any frau (d) Legal Penalties In case of any fraudulent or misrepresentation of information found in the financial statements served by the firm, there are heavy penalties for the persons responsible for the fraud which may tow to even insolvency of the firm.Most juridical laws across the globe have severe civil and criminal liabilities for misrepresentation of financial information. Solution (b)Costs Associated with disclosureThe mixed cost associated with the disclosure of financial statements can be classified as underCollection and Processing costsLitigation CostsPolitical costsCompetitive disadvantages