Analyst’s tasks & work
Category: Financial Control Management
Basic to analyst’s work is the ability to reconstruct the business transactions that are summarized in the financial statements. One can visualize this important skill as the ability to replicate the accountant’s work but in reverse order. The flow of analyst’s work:
a. Summarize and classify in the form of financial statements;
b. Accumulate transactions in T-accounts;
c. Express the transaction in the form of journal entries
d. GAAP — the framework of accounting for these transactions
e. Perception of reality behind business transactions
The knowledge of what information can be found in financial statements, where it is to be found, and how to reconstruct transactions, including the making of reasonable assumptions, are important skills in the analysis of financial statements. Besides, financial statements analysis requires knowledge of related disciplines, such as, accounting, economics, and finance, as well as analytical abilities.