1.11. Writing Skills Problem Staff members from the marketing department of your firm are doing a splendid job selling products to customers. Many of the customers are so pleased, in fact, they are also buying shares in the company's stock, which means that they receive a copy of the firm's annual report. Unfortunately, questions sometimes arise that the marketing staff members are woefully inadequate at answering. Technical questions about the firm's financial condition and performance are referred to the chief financial officer, but the director of marketing has asked you to write a memo in which you explain the key elements in an annual report so that marketing rep- resentatives are better prepared to respond to questions of a more general nature. Required: Write a memo no longer than one page (single-spaced, double-spaced between paragraphs) in which you describe the contents of an annual report so that marketing personnel can understand the basic requirements. The memo should be dated and addressed to B. R. Neal, Director of Marketing, from you; the subject is "Contents of an Annual Report." To the Student: In business writing, the primary elements are clarity and conciseness. You must keep in mind the audience you are addressing and the objective of the communication, 1.1. What types of questions can be answered by analyzing financial statements? 1.2. What is the eventual goal of the IASB? 1.3. What are the particular items an analyst should review and study in an annual report, and what material should be read with caution? 1.4. What can a financial analyst find in the MD&A section of the annual report? 1.5. What are the purposes of (a) the income statement, (b) the balance sheet, (c) the statement of cash flows, and (d) the statement of stockholders' equity? 1.6. Explain the importance of the notes to the financial statements. 1.7. What causes an auditor's report to be qualified? adverse? a disclaimer of opin- ion? unqualified with explanatory language? 1.8. Why is the management discussion and analysis useful to the financial analyst? 1.9. What is a proxy statement, and why is it important to the analyst? 1.10. Briefly describe the differences between the accrual basis of accounting and the cash basis of accounting. 1.11. Writing Skills Problem Staff members from the marketing department of your firm are doing a splendid job selling products to customers. Many of the customers are so pleased, in fact, they are also buying shares in the company's stock, which means that they receive a copy of the firm's annual report. Unfortunately, questions sometimes arise that the marketing staff members are woefully inadequate at answering. Technical questions about the firm's financial condition and performance are referred to the chief financial officer, but the director of marketing has asked you to write a memo in which you explain the key elements in an annual report so that marketing rep- resentatives are better prepared to respond to questions of a more general nature. Required: Write a memo no longer than one page (single-spaced, double-spaced between paragraphs) in which you describe the contents of an annual report so that marketing personnel can understand the basic requirements. The memo should be dated and addressed to B. R. Neal, Director of Marketing, from you; the subject is "Contents of an Annual Report." To the Student: In business writing, the primary elements are clarity and conciseness. You must keep in mind the audience you are addressing and the objective of the communication
