Accounting will affect our investment. For example, we have to know the company’s accounting information, so that we can decide if the firm is optimistic about their business prospects and expect higher future sales and profits.
The professor has mentioned that using the same quarter of the financial statement for this year to compare with the previous year. Furthermore, a business and investors are complementary to each other. In a business, there are financial intermediaries to provide business. The savings of firms are helped by the information intermediaries.
There are some companies that fool and give illusion to the investors. Therefore the fraud triangle states there are portions that contribute to increasing the risk of fraud, opportunity, incentive and rationalisation.
In class, there are some accounting statements shown by the professor. I am fascinated by the accounting statements and the explanation of the professor in a moment due to my number sense. The class inspired me to think deeply about the story of financial statements behind. For example, everyone likes the companies, but they all have a loss. Why do investors still want it? Because of the PIE (price-earning ratio). I enjoyed the class so much.