Why do people call FSA accounting? statements, understand, accounting

draz

Because most of FSA is just making a number fit a rule, which is what accounting is.

__________

"good personality ... or he was known as Lt. Mandingo during his army days."

kamara5

Dont know about everyone else, but I do relate it to accounting most of the time, maybe because when I did A/O-Level, this is what we called accounting, including the ratio analysis.

With respect to the CFA material, most of the FSA stuff is related to accounting treatment of leases or assets/liabilities or taxes or whatever. Of course, you are looking at it from the perspective of an analyst, and the material is not really accounting per se

karoliukas

I think the reason why people feel intimidated by it is because they somehow think FSA means accounting when in fact most accountants hardly know what ROE is.

FSA is a crucial part of analysing a company and its quite easy to master as long as you know what the 3 main types of financial statements are and how they are related to each other.

Once you understand the financials, the ratios, IFRS/GAAP crap, etc will all make sense

just my two cents.... now carry on whatever it was that you were doing

bluejazzy

bchadwick Wrote:
-------------------------------------------------------
> I'd say it's because the financial statements
> start with the stuff that is produced by
> accountants (Balance Sheet, Income Statement, Cash
> Flow Statement). I was surprised to learn that
> most of the ratios and a lot of the other analysis
> that goes into FSA is new to many accountants.


exactly

an accountant could careless about the ratios. He is forever stuck in the world of debits and credits. Its the finance guys that even both calculating these ratios (which are usually used to make investment decisions anyway)

kd26gioi

Uh, if you go to a university, the Financial Statement Analysis courses are always under accounting courses, never finance.

shootingstar

sundusg_ Wrote:
-------------------------------------------------------
> Dont know about everyone else, but I do relate it
> to accounting most of the time, maybe because when
> I did A/O-Level, this is what we called
> accounting, including the ratio analysis.
>
> With respect to the CFA material, most of the FSA
> stuff is related to accounting treatment of leases
> or assets/liabilities or taxes or whatever. Of
> course, you are looking at it from the perspective
> of an analyst, and the material is not really
> accounting per se

I think the accounting treatment for operating/capital leases is important to understand the true liabilities of a company and thats more important to a financial analyst not an accountant

We need to know the difference because it affects the way one values a company. Accounting would be more like if I enter into a operating leases what do I debit and what do I credit. The CFA doesn't worry about that.

eagles_dare13

sundusg_ Wrote:
-------------------------------------------------------
> the accountant needs to worry about that too.
> thats where accounting fraud comes from. the
> accountant is THE guy who knows how to manipulate
> financial statements, and he should, by
> definition, know the effects of this over that. i
> mean, not for the specific reason to commit fraud,
> but if you are preparing the financial statements,
> you dont just do the debits and credits without
> thinking or knowing about what chain effects the
> debits/credits will have.


Accounting fraud is usally caused by management not the accountants. Like I said they only care about the debits/credits.

Mechanic

the accountant needs to worry about that too. thats where accounting fraud comes from. the accountant is THE guy who knows how to manipulate financial statements, and he should, by definition, know the effects of this over that. i mean, not for the specific reason to commit fraud, but if you are preparing the financial statements, you dont just do the debits and credits without thinking or knowing about what chain effects the debits/credits will have.

btcapital

so the management is supposed to be an expert on understating expenses and overstating profits and what not to, say, meet debt covenants? they need the accountants to do it for them

Jolyn

Here is my 2 cents:

FSA is not accounting period! Accountants prepare financial statements.... FSA is about analyzing financial statements.

Just my POV!