University of Texas Permian Basin Financial Health Statements Discussion

As y’all know, Financial Statements are the subject matter of Chapter 02 and the “Optional Unit,” but they also go well (and way) beyond the textbook concepts. From your readings in this course, other courses, and general (financial and accounting) knowledge, please answer at least TWO of the following questions:

1. How are the various stakeholders—shareholders, employees, bankers, creditors, regulators, etc., and other interested parties—helped by the information contained in financial statements and how does that justify their involvement with the company?
2. What are some of the fairly recent—you can go back a decade or two, if you wish—corporate debacles that were probably the result of too much reliance on financial statements, fraudulent or otherwise? What were the underlying reasons and the resulting consequences?
3. What are the implications, and need (if any) of “Pro-Forma Financial Statements?”
4. What, in your views, are some of the major drawbacks of financial statements and how are the regulators, law makers, etc., proposing to strengthen the financial stability of corporations, especially banks, in recent years—based on financial statement information? What would you propose and why?