Chapter 8

Analyzing Business Performance


The mythical reader of financial statements takes many forms and has been the subject of many studies. Establishing the identity of the end user of financial reports is important for those who design accounting systems because they seek to provide an output of information, the scorecard of performance, which is going to be timely and relevant to the needs of the reader.

To many people lacking in financial knowledge, the general purpose reports produced by any accounting information system represent a mysterious collection of numbers that have a semblance of authority and an implied degree of accuracy. For these people the image of reports is further distorted by misconceptions resulting from ...

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