Guide to reading & understanding financial statements

 In this article, we will help you to get through the aspect of understanding any financial document. Getting complete knowledge of the financial document if can help you to easily get through this task. If you are armed with the knowledge you have a higher chance of identifying the financial health of the firm. 

This in turn will help you to avoid any risk and be perverse from all issues by coherently making appropriate business decisions. Financial statements offer a particular window that can help to build the health of the company. 

This can be extremely difficult to gauge through any other means. Critical information is then obfuscated. In case you are new to the world of financial statements, this article will provide you with a guide that you can go through. 

Way ahead to understand financial statement 

You are required to understand the position of the company in its individual and external frontier. 

You will be able to do this when you are able to acquaint yourself with the understanding of financial reports. Some of the major instruments in such reports consist of income statements, balance sheets, and also annual reports. 

You need to understand that such documents play a crucial role in determining the financial position and status of the firm. It will also help you to formulate better and more productive decisions for the firm. 

Balance sheet

The balance sheet provides you with the overall “book value” of the financial company. This also allows you to clearly see what are the resources that are being implemented in the firm. The balance sheet provides you with information about liabilities, assets, and owners’ overall equity. This in turn will help you to know about the borrower, owner, and amount that is invested in the firm by shareholders. 

The balance sheet is the appropriate way through which you can provide information to leverage and compute interest rates.  You can also use the accounting equation to understand the assets and liabilities situations of the firm. 

Assets = Owner’s Equity Assets + Liabilities

Income Statement

The income statement is also known as the P&L statement. This cohesively summarizes the overall impact of revenue, expense, gain, and loss transaction within a given period of time. The document is usually shared as part of the quarterly or annual reports. Therefore, it becomes easy to manage the trends and overall business activities of the firm. 

Cash Flow Statement

This statement provides a clear picture of what is actually happening with the cash of business within a specific duration of time. This time period is also known as the accounting period. This demonstrates the ability of the organization to operate within the short and long-term periods. 

Cash from operating income should be consistently checked and it should not exceed the overall net income of the firm. This is in turn will create a situation of positive cash flow and help maintain the financial stability of the firm.

Reading annual report

The annual report is the publication that helps to publish the report of the firm annually and also check the report of shareholders. Moreover, shareholders are eager to know the financial and operational conditions of the firm. 

Annual reports usually consist of editorial and storytelling information. Along with images, infographics, and a letter from the CEO of the company. Providing employees, investors, and employees with a clear understanding of the position of the firm. 

Conclusion

Above mentioned were some of the prudent ways through which financial reports can be read. It is necessary for you to understand that financial reports will provide the exact way through which you can implement exclusive and well thought financial decisions. ecadema is one of the most prominent platforms that can provide you with the apt knowledge of understanding financial reports.

What is CFE and is it worth it?

One of the prominent requirements for the education field is the requirement for qualified personnel who can identify any fraud or misuse. Examination fraud can easily break the spirit of those students who have worked hard throughout the year. 

Furthermore, it is up to the professional examiners to maintain the decorum of the examination hall. To keep all such factors intact there is a necessity for certified fraud examiners in the examination hall. CFEs are required to keep a periodic check on the education requirement of the CPAs in a cohesive manner. 

In this article, we will try to go through numerous factors through which it can become possible for you to become a part of CFE. We will try to declutter any misinformation that might boggle your mind in a regressive way. Through our discussion, our main focus will be to clearly define the course of CFE. 

The course CFE is not as popular as other courses but still, it has played great in the realm of education. The designation of CFE is issued by the ACFE. ACFE stands for the department of Association of Certified Fraud Examiners. This is the largest anti-fraud organization that is currently operating in the world. 

Making a cohesive understanding of the certified fraud examiner

In this section, we will try to understand how you can become a certified fraud examiner. We will try to unfold different perspectives related to this course in a cohesive way. To become a certified fraud examiner it is necessary to have a bachelor’s degree in any discipline. Furthermore, for successful candidature, at least two years of professional experience are required. This professional experience must be in the field of detection or deterrence of any fraud. 

The fields that are acceptable as a counted experience are auditing, loss prevention, accounting, and law. The qualifying aspect is taken care of by keeping the points system in mind which can help you to attain award credits. 

Award credits are receivable for the courses of education, experience, and professional affiliations. Furthermore, it is necessary for the applicants to achieve a pass certification for the CFE designation from the committee of ACFE. CFEs are required to focus on certain codes of ethics. 

Major characteristics of a Certified Fraud Examiner

Through this section, we will try to formulate a proper understanding of a Certified Fraud examiner. You might be unaware of many distinguishable factors of CFE and why they are important. 

Along with this, we will also inform you about some of the basic factors through which you can become a part of this educational realm. Following are some of the major factors:

• Certified fraud examiner correlates to the professional certification of fraud examiners. Such examiners are certified by none other than, the world’s biggest organization related to the activities of anti-fraud schemes. 

• One major requirement for all CFE applicants to have no less than two years of experience. 50 points are based on the experience of professional and educational affiliations. 

• In order to maintain the credential, continued education is one of the crucial requirements to fulfill. 

• In the decade 2020-2030, the requirement of financial examiners is set to increase by a range of 18%. 

Roles of a CFE

As a certified fraud examiner, you have the task to detect any anti-fraud professional. Such professionals have the task to investigate, discover and resolve any fraud case that may encounter. 

The overall outlook of the career of CFE

As a CFE you will find a wide range of career options. Mainly you can find employment opportunities as a forensic accountant, compliance officer, and state or private investigator. Along with this, you can also find positions of an executive, special agent, chief compliance officer, and inspector general. 

Conclusion

Through this discussion, it is quite clear that CFE plays a crucial role on various levels of the professional realm. Therefore if you are thinking of joining this workforce, you will be able to attain many opportunities in this field ahead. Furthermore, we would like to inform you ecadema is one such organization where you can embark upon several classes on Cfe online courses. This is the best platform to initiate your journey to CFE.