- CFA Exams
- 2023 Level II
- Topic 3. Financial Statement Analysis
- Learning Module 15. Evaluating Quality of Financial Reports
- Subject 7. Sources of Information about Risk
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Subject 7. Sources of Information about Risk PDF Download
A company's financial statements can provide useful indicators of financial or operating risk.
The management commentary (MD&A) can give users information that is helpful in assessing the company's risk exposures and approaches to managing risk.
Required disclosures regarding, for example, changes in senior management or inability to make a timely filing of required financial reposts can be a warning sign of problems with financial reporting quality.
The financial press can be a useful source of information about risk when, for example, a financial reporter uncovers financial reporting issues that had not previously been recognized. An analyst should undertake additional investigation of any issue identified.
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