Can investors rely on financial statements and analysts?
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In light of recent accounting and financial scandals (Enron, Tyco, Adelphia Communications), can or should investors solely rely on financial statements? Can investors have confidence in analysts employed by securities firms? What alternatives are there for investors?
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The 315 word solution is a practical discussion about sources of information including a realistic view of the credence that can be placed on those sources.
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In light of recent accounting and financial scandals (Enron, Tyco, Adelphia Communications), can or should investors solely rely on financial statements?
Relying upon independently prepared financial statements is still preferable to using company-prepared data. If you consider that those companies hood-winked their auditors, what is say that they wouldn't hood-wink the entire investing public. Unfortunately, some people and some company's ethics are below standards set by the industry. Life isn't perfect but hopefully those sad ...
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