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New BNA Analysis Provides Guidance for Employing Qualitative Techniques in Financial Statements

NEWS RELEASE

Contacts:
Mark Carrington
(703) 341.5880
mcarrington@bna.com

Arlington, Va. (May 13, 2009) – Investors do not invest based on financial statements alone, say authors Alan Glazer and Glenn Stevens in Financial Statement Analysis: Qualitative Techniques, the latest Portfolio guidance from BNA Tax & Accounting. Instead, they look at and beyond the numbers to better understand the company’s reported financial results, management, and prospects to identify any significant accounting issues that may exist.

Financial Statement Analysis (Portfolio 5122 in BNA’s Accounting Policy & Practice Series), helps financial analysts and other users of financial statements employ various qualitative techniques to improve the usefulness of the information contained in the statements.  This Portfolio defines the uses and objectives of financial statement analysis; identifies the requirements, characteristics, and limitations of the U.S. financial reporting system; and addresses qualitative analyses of particularly important events, including related party transactions, executive and board compensation, corporate governance, and risk management and hedging activities.

Glazer and Stevens describe the five fundamental steps of qualitative analysis and illustrate how those steps are used to analyze the items reported in balance sheets, income statements, and statements of cash flows.

This Portfolio’s detailed analysis contains examples of how to qualitatively analyze particular items in financial statements.  In addition, it provides worksheets that illustrate the types of information commonly used in qualitative financial statement analysis, including sample disclosures from public companies, financial statements, accompanying notes, management discussion and analysis (MD&A), regulatory filings, and other sources.

“Prospective investors can never rely solely on the information reported in company annual reports no matter how detailed they may be,” says BNA executive editor George Farrah. “This detailed, plain-English examination of qualitative techniques should be a boon to external auditors, boards of directors, attorneys, and anyone else entrusted with accurately assessing the financial health of a company.”

For more information on the BNA Accounting Policy & Practice Series go to http://www.bnatax.com/tm/apps_details.htm or call 800.372.1033.

About the Authors

Alan S. Glazer, a financial accounting professor since 1975, served as Associate Director of the Independence Standards Board’s conceptual framework project and assisted in drafting the audit and accounting guide Not-for-Profit Organizations for the American Institute of Certified Public Accountants.  He has published articles on auditor independence and accounting ethics, and he coauthored BNA Tax and Accounting Portfolio No. 3201, Accounting for Museums.

Glenn L. Stevens served the agricultural banking community at the Farm Credit Bank of Baltimore, holding numerous executive positions—Chief Financial Officer, Executive Vice President, and Chief Operating Office—before entering academia in 1995.  Dr. Stevens taught finance courses at Franklin and Marshall College until he retired in 2007.

About BNA Tax & Accounting
BNA Tax & Accounting is the foremost source of news, analysis, and practice tools for tax attorneys, estate planners, accountants, and corporate tax and financial accounting professionals. For more than 50 years, BNA Tax & Accounting has offered practitioners expert insights and guidance on every significant issue in tax planning and financial accounting. Written by practitioners for practitioners, BNA’s award-winning Portfolios offer topic-driven, in-depth guidance on transactions designed to help tax professionals achieve new levels of excellence and client service. Visit the BNA Tax & Accounting Center online at www.bnatax.com.

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BNA is the leading independent publisher of print and electronic news and information for professionals in business and government. BNA produces more than 300 news services, including the highly respected Daily Labor Report, U.S. Law Week,and Daily Report for Executives. Visit BNA online at www.bna.com