CCIFP - Accounting and Reporting
Exam Questions & Answers4
External Users of Financial Statements - ANSWERS-1) Owners or Potential Investors - Focus on
evaluating investments, determining whether company mgmt is carrying out its responsibilities,
making decisions regarding buying or selling equity interests, and evaluating strategic decisions.
Construction companies are usually private and closely held. Owners have some degree of
involvement.
2) Surety Bond Underwriters - Sureties are one of the most critical external users of
construction financial statements.
3) Bankers and Other Credit Sources - Tend to be less specialized than sureties and are
concerned with traditional financial information.
4) Vendors - They use FS to evaluate the contractor's ability to satisfy current and future
obligations
5) Customers - They use FS to evaluate the contractor's ability to perform its obligations under
and existing or potential contract.
6) Prequalifiers and Licensing Boards - Such as state prequalification and licensing boards.
important to understand the states formatting requirements.
Uses of Internal Construction Financial Information - ANSWERS-1) Used to evaluate
management performance
2) Used to evaluate where a company stands in relation to its commitments and obligations
3) Used as alarm to warn management of impending problems
4) Is a predictor to assist management in evaluating prospects for the future
5) Used to evaluate profitable vs unprofitable operations, productive vs unproductive
employees and so on
6) Used as a confirmation of events and circumstances that management might intuitively
expect
Exam Questions & Answers4
External Users of Financial Statements - ANSWERS-1) Owners or Potential Investors - Focus on
evaluating investments, determining whether company mgmt is carrying out its responsibilities,
making decisions regarding buying or selling equity interests, and evaluating strategic decisions.
Construction companies are usually private and closely held. Owners have some degree of
involvement.
2) Surety Bond Underwriters - Sureties are one of the most critical external users of
construction financial statements.
3) Bankers and Other Credit Sources - Tend to be less specialized than sureties and are
concerned with traditional financial information.
4) Vendors - They use FS to evaluate the contractor's ability to satisfy current and future
obligations
5) Customers - They use FS to evaluate the contractor's ability to perform its obligations under
and existing or potential contract.
6) Prequalifiers and Licensing Boards - Such as state prequalification and licensing boards.
important to understand the states formatting requirements.
Uses of Internal Construction Financial Information - ANSWERS-1) Used to evaluate
management performance
2) Used to evaluate where a company stands in relation to its commitments and obligations
3) Used as alarm to warn management of impending problems
4) Is a predictor to assist management in evaluating prospects for the future
5) Used to evaluate profitable vs unprofitable operations, productive vs unproductive
employees and so on
6) Used as a confirmation of events and circumstances that management might intuitively
expect
