Making false reports on financial information may stem from the fact that the management misled the users of financial statements to judge the performance or profitability of the audited entity by manipulating profits.
The motives for false reporting of financial information mainly include:
1. Meet market expectations or specific regulatory requirements.
2. Maximize private pay according to financial performance.
3. Tax evasion or fraud.
4. Defrauding external funds.
5. Cover up the fact of embezzlement of assets.
Financial information refers to economic information combined with other materials, which is used because of its characteristics. Compared with financial information, non-financial information refers to all kinds of information materials that appear in the form of non-financial information and are directly or indirectly related to the production and business activities of enterprises.
The method of analyzing enterprise financial information mainly adopts "comparison method", that is, vertical comparison and horizontal comparison. Vertical comparison is mainly the comparison of the development order of the enterprise itself from history to the present; Horizontal comparison is to compare with domestic advanced enterprises, world-class enterprises and leading enterprises in the industry to see where the gap is.