1. Do you think it is reasonable the SOX law requires the CEO and CFO to certify the financial statements? If you were CEO, what type of checks/balances would you put in place organizationally to ensure the statements were accurate?
2. What are the advantages of going back more than 2 years in showing a certain trend on a business? For example, would a 5 year comparison of the Income Statement be a useful tool? What insight could this provide to business owners and potential investors?
3. Some financial analysts/accountants think that the Statement of Cash Flows is the most important financial statement. Do you agree or disagree with this? Why or why not? Hint - consider a business that is highly cyclical in nature like an ice cream shop!
4. What is the payback method? What is it used for? Explain in detail.
5. There are many different factors that affect international finance. Define and discuss any two of them. Why are they important and how do they affect decision-making?