Financial Statement Analysis Report

Running head: FINANCIAL STATEMENT ANALYSIS REPORT
Avid Technology Inc.
ADM4342M
Hassan, Ali (8467946)
Hawari, Khaled (5887702)
Oladeji, Toluwalope (8287338)

1FINANCIAL STATEMENT ANALYSIS REPORT
Executive Summary:
This report aims at analyzing and understanding the material misstatement and restatement of
financial information in the financial statement of an entity. For better utilization of financial
information and better decision making the accounting system should be transparent and proper
disclosure principles should be followed. In this report, the case study of Avid Technologies is
chosen for analysis of those schools of accounting in the view of respective GAAP and IFRSs.
Lastly, the paper concludes with some affects of such restatement and possible way outs for
betterment of the financial reporting system.

2FINANCIAL STATEMENT ANALYSIS REPORT
Table of Contents
Introduction:....................................................................................................................................3
Brief Overview of the Company:....................................................................................................3
Case study Material Misstatement/Restatement in the financial statement:....................................3
Applicable Accounting Standards:..................................................................................................5
Stock Market Reactions:..................................................................................................................6
Accounting Failure:.........................................................................................................................9
Usefulness of accounting Information:..........................................................................................11
Agency Theory:.............................................................................................................................11
Conclusion:....................................................................................................................................12
Appendix A:...................................................................................................................................13
References:....................................................................................................................................15

3FINANCIAL STATEMENT ANALYSIS REPORT
Introduction:
Accounting helps in measuring the financial and operational performance. Financial
statement is the ultimate output of the accounting system, which helps the stakeholders to make
certain important decisions. If there are any material restatement, misstatement and manipulation
in the financial statement that will affect the decision making process of the stakeholders, which
will lead them to suffer a loss. In this report, accounting restatement and misstatement is chosen
for analysis and understanding with a chosen company Avid Technology Inc for better analysis
and discussion of the topic.
Brief Overview of the Company:
Avid Technology Inc. is the world’s leading provider of audio and video technology for
media organizations and independent professionals.1 Avid provides solutions to create, distribute
and monetize films, videos, music recordings, TV shows, live concerts and news broadcasts in
the highly competitive and rapidly changing media industry. For 25 years now, Avid led the
revolution in non-linear editing and has become the leading technology provider and trusted
strategic partner for video and audio production, broadcast, live sound, shared storage and more.
Case study Material Misstatement/Restatement in the financial statement:
In March 2013, a shareholder of Avid Technology Inc. named Nick Di Vincenzo,
represented by Robbins Arroyo LLP, had filed a complaint in the US District Court for the
District of Massachusetts against Avid’s officers and directors. The complaint was concerning
the company’s violation of the Securities Exchange Act of 1993 between the periods of April 22,
2011 and February 22, 2013, known as the “Class Period”. Shareholder Nick Di Vincenzo
1“Avid Technology, Inc. Sued by Investor,” PR Newswire. March 29, 2013, http://www.prnewswire.com/news-releases/avid-technology-inc-
sued-by-investor-200635071.html. (accessed on February 11, 2019).