Analysts are encouraged to develop forecasts that are realistic, objective, and unbiased

One main risk that is encountered by analysis is the inheritance risk that happens when an organization’s management take over the risks that were caused by the previous management and workers. Some of these risks are not well defined and it affects the financial books and other records. Another risk faced is the fraud risk where the employee in the same firm ends ups stealing money from the company and this is bad because it affects the reports on finance. Incentives that are given are in form of bonuses payments that are given to them as a motivation apart from their salaries.

Trip is another form of incentive that the organizations can pay a journey for the employees to motivate them to work extra hard. To prevent themselves from involving getting into trouble with the management, accountants at times manipulate these data to fit the model. It is because sometimes predictions are opposite of their expectations and this can make the management to live confirm the records that may be viewed as suspicious. When predicting, biasness is observed because it involves manipulations to get specific results and thus uncertain outcomes are realized. Analysts are faced with challenges of balancing these in organizations during their assessment.

Financial statements are usually used to show the business the way it performs both now and in future. It gives a good trend on how one thinks of how the business can perform overtime. They indicate how the businesses have been performing overtime especially in terms of the profitability, the flow of the cash, liabilities and the assets. Therefore, the financial forecasts help the company to predict the future and how it will sustain the waves affecting the business.

The concept of articulation and additively elaborate on how changing the values that have errors to suit the balance sheet. Therefore, this process involves checking the daily operations to ascertain that there is no problem on how the financial figures are put in the books. If these concepts are done to the various transactions that are done on daily basis, it will help the analysts to overcome the problem of future errors in the forecast because the analysis depends on the daily records that are done correctly. All organizations need to come up with a strategy that will enable them to apply the two concepts in their daily transactions as this will be helpful in future analysis of the company. Correct data is important in a company’s analysis.