Annual reports and financial statements

Activity submission

LO5: Identify the limitations of ratio analysis.

LO6: Explain the impact that pressure exerted on management might have on the accuracy of financial statements.

LO7: Describe how management can mitigate the risk of fraud and misrepresentation in financial statements.

LO8: Analyse the financial statements of a business to determine its financial performance.

Name:

1. Instructions and guidelines (Read carefully)

Instructions

1. Insert your name and surname in the space provided above, as well as in the file name. Save the file as: First name Surname M7 U3 Activity Submission – e.g. Lilly Smith M7 U3 Activity Submission. NB: Please ensure that you use the name that appears in your student profile on the Online Campus.

2. Write all your answers in this document. There is an instruction that says, “Start writing here” under each question. Please type your answer there.

3. Submit your assignment in Microsoft Word only. No other file types will be accepted.

4. Do not delete the plagiarism declaration or the assignment instructions and guidelines. They must remain in your assignment when you submit.

PLEASE NOTE: Plagiarism cases will be investigated in line with the Terms and Conditions for Students.

IMPORTANT NOTICE: Please ensure that you have checked your course calendar for the due date for this assignment.

Guidelines

1. There are 4 pages and 4 questions in this assignment.

2. Make sure that you have carefully read and fully understood the questions before answering them. Answer the questions fully but concisely and as directly as possible. Follow all specific instructions for individual questions (e.g. “list”, “in point form”).

3. Answer all questions in your own words. Do not copy any text from the notes, readings, or other sources. The assignment must be your own work only.

2. Mark allocation

Each question receives a mark allocation. However, you will only receive a final percentage mark and will not be given individual marks for each question. The mark allocation is there to show you the weighting and length of each question.

Question 1 4

Question 2 2

Question 3 2

Question 4 12

TOTAL 20

Please note: Unlike most other assignments, this assignment will not be marked using a rubric, given the nature of the answers required.

3. Questions

Reminder:

You are not required to conduct independent research for this submission. However, if you wish to make use of additional sources outside of the course material, you will need to reference these sources correctly. Please consult the Course Handbook in the Orientation Module for guidance on referencing requirements.

In-text citations and reference lists are not included in the word count of your submission.

Question 1

Identify and explain two of the possible limitations of ratio analysis. (Max. 60 words)

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Question 2

Describe how pressure exerted on senior management by shareholders and other parties may impact the accuracy of financial statements. (Max. 50 words)

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Question 3

Suggest one action management can take to mitigate the risk of fraud occurring when financial statements are being compiled. (Max. 50 words)

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Question 4