For this section, looking for a discussion about the potential issues that may arise when interpreting pro forma financial statements. You may consider discussing the policies in place and how they affect the pro forma financial reporting. Are financial policies and GAAP being completely followed when pro forma financial statements are prepared? What are some potential issues an investor may have when interpreting the results of the pro forma financial statements?

C. Identify potential issues in interpretation of financial information, providing examples to support your ideas. III. Management Analysis Brief: Your management analysis brief should explain financial information to management. Provide evidence from your accounting workbook to support your ideas where applicable.

(1). Do you think the information I borrowed and summarized into two paragraphs on the Microsoft Word file I have attached to this email is an acceptable and/or satisfactory response to Part C. Do you think the information I borrowed and summarized into two paragraphs on the Microsoft Word file I have attached to this email is an acceptable and/or satisfactory response to Part C.

Issues in interpretation of financial information on Pro Forma financial statements will be identified. An issue of investors interpreting financial information that make up Pro Forma financial statements I would like to identify is the fact that the style of the data incorporated by accountants on Pro Forma financial statements does not comply and/or differs from the Generally Accepted Accounting Principles guidelines. As a result, stockholders and lenders and donors can be misguided under particular situations by the information found on the Pro Forma financial statements. Inventors find it difficult to estimate the similarity and difference between the information found on the ordinary, annual financial statements as well as the Pro Forma financial statements released by and associated with one company and/or between more than one corporation (Katz, 2001). U.S. Securities and Exchange Commission rules and financial reporting obligations guide Pro Forma financial statements. For example, U.S. Securities and Exchange Commission's Article 11 needs participants whether they are merchandisers or manufacturers submit and enter unaudited information on Pro Forma Financial Statements showing the result of any meaningful purchase or sale that usually consists of a Pro Forma Income Statement and Pro Forma Balance Sheet (Haggerty et al., 2020).

Generally Accepted Accounting Principles require accountants to describe (or report) costs (i.e., expense) in the very same span (period) that revenue is reported (Price, 2019). The information that make up Pro Forma financial reports (statements) are adapted from Generally Accepted Accounting Principles, which builds on and/or takes away from data, which is needed by U.S. Generally Accepted Accounting Principles (Rothbort, 2008, Thomas, 2016). Therefore, Pro Forma financial statements do not entirely follow the reporting requirements of the U.S. Generally Accepted Accounting Principles because the Pro Forma financial reports is just an instrument employed by the managers of the top management of a company to predict the future financial performance and plan future scenarios, such as a merger and/or a purchase (myaccountingcourse.com, 2020). A potential problem that investors might have when faced with interpreting the effects of the pro forma financial statements is that they, the investors, might misread certain information on the Pro Forma financial statements and make an uneducated decision and buy shares in a particular unprofitable company's common stock and not worth holding if. This, of course, could happen, for example, if an accountant or accountants of a company discloses detailed illustration of reconciling items but accidentally or intentionally does not record and reveal the dollar amounts of these balanced items on their respective area of a Pro Forma financial statement (James & Michello, 2003).