- CFA Exams
- CFA Level I Exam
- Study Session 6. Financial Reporting and Analysis (1)
- Reading 19. Introduction to Financial Statement Analysis
- Subject 1. The Roles of Financial Reporting and Financial Statement Analysis
CFA Practice Question
An analyst may be called upon to perform a financial analysis for different reasons, including the ______.
II. assessment of credit risk
III. performance of due diligence in an acquisition
IV. valuation of equity securities
I. evaluation of a subsidiary's performance relative to other business units
II. assessment of credit risk
III. performance of due diligence in an acquisition
IV. valuation of equity securities
A. I, II, III and IV
B. II, III and IV
C. I, II and IV
User Contributed Comments 6
| User | Comment |
|---|---|
| NNikolaiss | Aren't due diligence is out of scope of analist? should legal person do it? |
| leon121 | @NNikolaiss: The term "due diligence" is not exclusively for legal folks. From Wikipedia: Due diligence is an investigation of a business or person prior to signing a contract, or an act with a certain standard of care. It can be a legal obligation, but the term will more commonly apply to voluntary investigations. |
| CJPerugini | Due diligence evaluation describes the role of an auditor. |
| markbucfa | How about "The analyst prepares reports about the status/potential of a company to be acquired and it's the *due diligence* of the acquirer if he has to proceed or withdraw from the acquisition."? |
| sevywonder | Diligence is just research done into an investment. No legal or audit connotation here. |
| oualidb | It's viewed in a financial angle '' Acquisition'' |