Accounting 610 – Accounting in a Corporate Environment – Week 4

Week 4 – Statement Of Cash Flow and Flexible Budgeting

Now we move into the Statement of Cash flows, probably the most difficult to analyze and prepare statement. It’s often an afterthought, but it’s the most useful statement and needs to be reviewed with the balance sheet and income statement. I always remember hearing about how Enron’s fraud was hidden in everything but the cash flow statement, and if more people paid attention to it, they maybe would have caught it earlier. We also went into flexible budgeting, which is adjusting the budget for changes in production, another important managerial topic. I should add here the papers are getting more and more difficult. I am doing well on them but they are taking more time to do the analysis. There is a specific ask in not only analyzing the paper but identifying any GAAP provisions of interest and how they can be manipulated. I am finding that my expertise in GAAP, which is nearly 20 years old, is mostly out of date. So many changes resulting from that 2008-2009 financial crisis that played out after I left that industry and started focusing more on technology and systems.