A North Chicago CPA explains Financial Accounting Reporting Practices
Financial reporting, and especially financial statements from CPAs, usually cannot and do not separate management performance from enterprise performance. Business enterprises are highly complex institutions, and their production and marketing processes are often long intricate. Enterprise successes and failures only result of the interaction of numerous factors. Management ability and performance are contributing factors, but sore events and circumstances that are often be on the control of management, such as general economic conditions and supply and demand characteristics.
What happens when business enterprise is usually so much a joint result of a complex interaction of many factors that affect businesses in North Chicago and neither accounting or other statistical analysis can discern with reasonable accuracy the degree to which management affected the joint result.
Financial reporting provides information about enterprise during a period when it was under the direction of a particular management but does not directly provide information about that management performance. The information is therefore limited, even to the best accountants in Chicago, for purposes of assessing management performance art from enterprise performance.